Risk Analysis Of Domino's Pizza Delivery Drone System Essay.

Case Analysis

Risk Analysis  Area of risk related to teachnology.

Analyze a case study to identify and propose a strategy for dealing with risks.

Review the case study and the technology aspects of the case study. Identify areas of risk related to technology and technology use in the case study, including business, financial, technical, reputation and other risks.

Dominos pizza is an American pizza restaurant chain that was founded in the year of 1960. The headquarter of corporation is located in the Domino’s Farms Office park in Ann Arbor, Michigan. In the year of 2018 this corporation became the largest pizza seller worldwide in terms of sales.

Dominos had been associated with unveiling a new drone delivery system trail for the New Zealand based pizza customers. This is the new technological initiative that is expected to have a dramatic slash upon the delivery time of Dominos. This is also expected to help in achieving a greater market reach than the options which are existing.  This report would be discussing about the various kind of risks that are associated with the usage of the drone technology (Clothier et al., 2015). After identification of the risks they would be ranked so as to determine the risks of highest priority. Lastly the report would be discussing about the techniques that can be adopted so as to eliminate the risks.

The usage of the drones for delivery system has gave rise to new risks. It is expected that when the law would get finalized more incidents are likely to occur. This type of unexpected events might lead to multi-dollar claims against the business (Wolf, 2017). In the section the different risks that are likely to be faced by the new drone technology have been categorized and listed.

The different risks have been listed below:

Strategic: This is associated with considering those risks, which are likely to have an effect upon the strategic direction along with the process of survival of the organization. Some of the important factors that are responsible for playing a vital role in this category include the macroeconomic risks (Ahmed, 2018). This are type of risks that are created by the different fiscal policies of central as well as the federal governments, along with the impacts that different disruptive technologies like the Internet is having. These type of risks are also responsible for making the business decision-making process poor along with the direction setting, and extend to such things as mergers and acquisitions.

Regulatory risks: There are no particular law and regulation regarding the flying of drones. It is just possible for the organization to load the drones with an arbitrary amount of payload. In order to fly the drones, it is essential that the organization gets approval from the authorities of the country. The usage of the drones has grown at a rapid rate and for this reason the regulators have not been capable of providing a strong oversight of this technology (Lodge et al., 2016). The surveillance associated with the drones used for tracking the paths might lead to breach of privacy which leads it against the law. For this reason, the organization face certain cases when others launch complains against the delivery drones.

Business/financial: Financial or the business risks are the risks which generally covers the various affects that the drone technology would be bringing upon the business operations of the organization. This might be including the financial loss due to unexpected technical failures of the drones and damage to the drones (Sandbrook, 2015). Unable to delivery products to the desired customers due to technical errors might lead to huge financial loss to the organization.

Identification of the risks

Operational: This is a wide-ranging category of risk that involves the state when any aspect of the business fails. This type of failure includes the failure of management, failure of the system and the software, errors done by human, inefficiencies in the process and failures in the different procedures (Brooks et al., 2017). However as the technology is new, for which it is recognized as being an important part of an overall risk management framework.

Technical: This type of issues is associated with inclusion of the incomplete design of the entire system, incomplete environmental analysis. Besides this, there also exists technical issues like problems arising when the drones moves out of the receiver range and system failure. Another major reason for this type of risk is the change requests due to errors, and formation of inaccurate assumptions related to the delivery distance might also lead to technical failures. Besides this drone are also vulnerable to cyber-attacks (Enemark, 2014). As the drone that is used here is not serving for any kind of military purpose, so they rely upon data links which are unencrypted. The drones for receiving commands, control and for navigation use this unencrypted data links. For this reason, the hackers are associated with jamming intercepting and manipulating the controls of the drones making this technology have high risks.

Environmental risks: Environmental conditions like the heavy rain, storms and many more might be associated with affecting the drone operations (McNeil, Frey & Embrechts, 2015). Besides this they are also likely to pose a risk to the wildlife as well specially to the birds.

Organizational: this type of risk is associated which are to be faced while handling the new technology by inexperienced staff, losing of the drones while delivering orders due to mistakes of the employees. The risk also includes the delayed deliveries of the orders. Besides this the functional units might also not be available or might be overloaded.

Tolerate: Tolerate or the acceptance of the risk means that the company has taken no actions to mitigate or reduce the risks. Dominos would be tolerating of only those risks which is not cost effective and would not be having any kind of impact upon the operations of the business. The environmental risk is the only risk that is to be tolerated by making use of the alternative delivery system.

Transfer of risks: This is the type of risk which is associated with usage of different forms of insurance or is associated with the sharing of the risks with some other third party. For example, the technological risks that are faced by Dominos. To prevent the system from getting hacked the organization might take help from third party entities so as to provide cyber security.

Treat: treat or reduction of the risks mainly indicates the steps that are to be adopted by the organization Dominos in order to eliminate the various kind of risks or to minimize the occurrence of risks. This paper has been associated with depicting certain steps that can be adopted in order to eliminate or reduce the probability of occurrence of different kind of risks. For example, usage of trained employees, usage of encrypted data links and many more.

Ranking of the risks

Terminate: Termination or elimination of the risks is the simplest way which can be adopted by Dominos in order to fix the risks. But this is a process which has pre-request that is the risk can only be removed only when the risk is affecting the organization materially. Therefore, it is essential for the organization to add certain monitoring and controlling techniques to check the system regularly.

Conclusion 

The drone delivery system is used by the organization Dominos would be bringing a lot of benefits. However, along with the benefits there also exists various kind of risks which are likely to be faced by the entire drone delivery system. Risks are of various type and this includes the operational risks, strategic risks, operational risks, regulatory risks, environmental risks and many more. In this report all the likely risks that are to be faced by dominos have been discussed in brief in this report. The report also highlights the various ways which can be adopted in order to mitigate the risks. All this risk mitigation strategies if adopted would be leading to success of the drone delivery system in future. Drones can also be used by the organization for other purposes as well besides the delivery system. Drone delivery system would not only be benefiting the organization but is also a step ahead to the adaptation of new innovative system.

References:

Ahmed, S. (2018). From Threat to Walking Corpse: Spatial Disruption and the Phenomenology of" Living under Drones". Theory & Event, 21(2), 382-410 [Retrieved from https://muse.jhu.edu/article/690525/summary].

Bromiley, P., McShane, M., Nair, A., & Rustambekov, E. (2015). Enterprise risk management: Review, critique, and research directions. Long range planning, 48(4), 265-276 [Retrieved from https://www.sciencedirect.com/science/article/pii/S0024630114000582].

Brooks, S., Brooks, S., Garcia, M., Lefkovitz, N., Lightman, S., & Nadeau, E. (2017). An introduction to privacy engineering and risk management in federal systems. US Department of Commerce, National Institute of Standards and Technology [Retrieved from https://www.huntonprivacyblog.com/wp-content/uploads/sites/28/2017/01/NIST.IR_.8062.pdf].

Clothier, R. A., Greer, D. A., Greer, D. G., & Mehta, A. M. (2015). Risk perception and the public acceptance of drones. Risk analysis, 35(6), 1167-1183 [Retrieved from eprints.qut.edu.au/80007/1/Authors%20Version%20-%20Manuscript%20Final.pdf].

Enemark, C. (2014). Drones, Risk, and Perpetual Force. Theics & International Affairs, 28(3), 365-381 [Retrieved from https://cadair.aber.ac.uk/dspace/bitstream/handle/2160/26329/Enemark_drones_EIA_2014.pdf?sequence=1].

Hopkin, P. (2018). Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers [Retrieved from Hopkin, P. (2018). Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers].

Lodge, D. M., Simonin, P. W., Burgiel, S. W., Keller, R. P., Bossenbroek, J. M., Jerde, C. L., ... & Chadderton, W. L. (2016). Risk analysis and bioeconomics of invasive species to inform policy and management. Annual Review of Environment and Resources, 41 [Retrieved from https://www.fs.usda.gov/treesearch/pubs/download/52865.pdf].

McNeil, A. J., Frey, R., & Embrechts, P. (2015). Quantitative Risk Management: Concepts, Techniques and Tools-revised edition. Princeton university press [Retrieved from https://actuariesindia.org/downloads/souvenir/Book%20Review/Quantitative%20Risk%20Management%20Concepts%20Techniques%20and%20Tools.pdf].

Sadgrove, K. (2016). The complete guide to business risk management. Routledge [Retrieved from llrc.mcast.edu.mt/digitalversion/Table_of_Contents_129744.pdf].

Sandbrook, C. (2015). The social implications of using drones for biodiversity conservation. Ambio, 44(4), 636-647 [Retrieved from https://link.springer.com/article/10.1007/S13280-015-0714-0].

Wolf, H. G. (2017). Drones: Safety risk management for the next evolution of flight. Routledge [Retrieved from https://www.taylorfrancis.com/books/9781315471419].

Wolke, T. (2017). Risk Management. Walter de Gruyter GmbH & Co KG [Retrieved from https://books.google.co.in/books?hl=en&lr=&id=DyY-DwAAQBAJ&oi=fnd&pg=PR5&dq=Wolke,+T.+(2017).+Risk+Management.+Walter+de+Gruyter+GmbH+%26+Co+KG+&ots=XXLXR4mY0e&sig=zcek5swMG_zm8hhV9oRIFU4HPCA#v=onepage&q=Wolke%2C%20T.%20(2017).%20Risk%20Management.%20Walter%20de%20Gruyter%20GmbH%20%26%20Co%20KG&f=false].