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Types of Risk Management

1313 words (5 pages) Essay in Management

23/09/19 Management Reference this

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Risk is the likeliness of an uncertain or unwanted event or condition from occurring.Risk management is the process of identifying, evaluating and minimization of risks to maximize the opportunities. In simple words, Risk management is the management of risk.

Risks can come in various forms like financial, technological, political and environmental risks. For a business to be successful, it is a necessity to know how to manage such risks and to know how to overturn them into opportunities.

We live in times where the business environment is ever changing and new risks and opportunities come from time to time. The risk that a business faces might not only be external but also internal. This section gives an overview of the risks of establishing Disneyland in Mexico City.

Risk Analysis

Main Risks

  1. Natural Disasters

  Mexico City and Mexico in general are subject to occasional earthquakes and hurricanes. While earthquakes are usually unpredictable, the Hurricane season falls from the month of June to the months of October and November. Mexico City lies in the centre of Mexico so, there is no threat of tsunamis but due to tropical storms and hurricanes there are threats of flash flooding and landslide. Due to this there maybe disruption of local services and transportation services.

Mexico is also subject to volcanos. While Mexico City close to two volcanos Izztaccuhuatl and Popocatepetl, which lie on the south of Mexico City. Popocatepetl is more active between the two with the most recent eruption happening as late as 2013. (Zorilla 2015)

  1. Security

Mexico faces a very ugly domestic terrorism problem of drug Cartels. It is simply know as Narcos the rest of the world and is referred to as La Mafia by the Mexicans (Drug Cartels 2019). Kidnappings and gun violence is common is Mexico City. Mexico has one of the highest crime rates in the world in terms of gun violence. This is going to be a big problem to tackle as the situation is the same throughout the country as well as in the capital city. 

  1. Safety

Safety will always be a risk in the Theme Park industry. So, rules and procedures need to be followed by the staff as well as the visitors. It requires the park staff to remain vigilant for any form of danger and keep an eye for hazards. Theme parks have their usual share of lawsuits due to poor safety standards. Almost all the theme parks face this problem when they begin operation.

Disneyland Mexico City will have its own Safety Management Team on site to tackle any safety issues immediately. Also, disclaimers will be communicated with the guests before entering any ride including the health risk when going on certain rides.

  1. Land Availability

Mexico City is a medium sized city but has a massive population of almost 9 million people. It is one of the biggest cities in the world in comparison to population. It has a size of 1,485 km2 and although the city center is very densely populated, there is availability of land resource in the outskirts of Mexico City (Valle-Jones 2013)

  1. Trade Embargo

Changing laws and regulations in Mexico can affect the opening of Disney Land. Although Mexico has had a fairly stable political scene, rampant corruption is one of the things that is risk. The uncertainty of the friendship between Mexico and United States is also another problem. The uncertainty around the regulation and compliance must be taken in to account (Ernst & Young 2010) Mexico may impose any number of restrictions—trade restrictions, ownership restrictions, or currency exchange controls, as it is an American company. Allocating some budget to tackle these contingencies, would be the best way to stay ahead of the problem. Not participating in any political activities is the best solution to the problem.





  1. Natural Disasters



  1. Security



  1. Safety



  1. Land Availabilty



  1. Trade Embargo



Mitigating Risk

  • Natural Disasters
    Special care will be given to make the buildings earthquake proof. Building codes will be strictly observed and architects and engineering experts from all over the world will be called to ensure the safety is the top priority when construction starts. Multiple special disaster proof bunkers will also be constructed with necessary supplies for the customers to be used during natural calamities near the main attractions of the park. These bunkers will provide protection from lava flow during volcanic eruption, floods and earthquakes.
  • Security
    CUSCEPT is the paramilitary municipal police of Mexico. It mainly has a presence in the Tancirato area of Mexico but is also present in the other parts of Mexico. Its function is to prevent the kidnapping and to stop the Mexican Cartels. We will also be seeking protection from the government. We will also be hiring civilian gunmen to protect the theme park by offering to help to fund the Tancirato Public Security Force in exchange for protection of the park. CUSCEPT will be playing a preventative role and works in collaboration with the civilian gunmen (Flannery 2017). In times of emergency, all the people will be moved to the special disaster proof bunkers until the danger is clear.

Reference List:

  1. Ernst and Young, October 2010, Business Briefing Series
  2. Fogler, HS and LeBlanc, SE, 2014, Strategies for Creative Problem Solving, Prentice Hall, Upper Saddle River, New Jersey
  3. Garrido, F 2018, Top Challenges of Doing Business in Mexico, viewed on 29 January 2019, <>
  4. Hill, C 2007, International Business, McGraw Hill/Irwin, New York
  5. SaldaƱa Zorrilla, B 2015, Natural disasters, foreign trade and agriculture in Mexico, SpringlerBrief
  6. Vita, S 2018, 4 Economic Challenges Mexico Faces, viewed on 28 January 2019,

7.      Flannery, N. P 2017, Mexico’s avocado army: how one city stood up to the drug cartels, viewed on 5 February 2019

  1. Wikipedia contributors. (2019, February 4). Drug cartel. In Wikipedia, The Free Encyclopedia. Retrieved 13:59, February 12, 2019, from
  2. Valle-Jones, D 2013 , Maps of Mexico City, blog post , viewed on 1 February 2019, <>
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