Posted: February 21st, 2022

ms6012 m4a2 response

Arthur Cooper 
   
Duke Energy is a southern power company that was formed in 1905by Dr. Walker Gill and his brother but received backing from James B Duke who later took control of the company (Duke Energy, 2018). This is considered one of the largest power companies in the US. However, they rely on several types of natural sources to produce energy nuclear power plants, coal-fired plants, conventional hydroelectric plants, natural-gas turbines to handle peak demand, and pumped hydro storage (Duke Energy, 2018). Organizations of this type are highly regulated by the government and are always subjected to advancements in technology. Risks that Duke may face consist of Political Risks that creates negative returns on investments due to political changes or unstable governments (Keat, 2013). With such tough government regulations, they may occur new policies that restrict their processes and production procedures. For instance, Duke Energy was fined and taxed heavily because of bad practices pertaining to their coal operated plants (Duke Energy, 2018). Duke is also subjected to technological risks where organizations faces risks due to design, function and manufacturing of a product. Competitors of Duke are always innovating and creating newer and safer ways to produce energy. The government also requires organizations to follow certain processes in their power production. If Duke is unable to remain competitive due to this new technology or make a profit due to high government mandates, they are subjected financial troubles.
Ford Motor company is an American base automaker that stretches across the world with factories in several countries. The automotive industry is always changing and adopting new technologies and innovations. They are subjected to strict government mandates as well. They must also remain competitive in the arena of new car innovations and technology. People are demanding safer cars with new technological features and environmentally safe. The risks they face are economical which are created by revenue not being enough to cover cost of production due to under/wrong forecasting (Keat, 2013). New technology and innovations are only as good as the customer demands. This means that if the people do not demand these products they are at the expense of the company. Political risks are also risk that Ford may face especially since they have factories in different countries. The government of these countries can collapse or create tariffs that may interrupt profits. Technological risks are also risk they may face. The people are demanding electric cars and self -driving cars more. If Ford is unable to remain competitive or produce these products it can affect their profits.
Both companies are subject to all three forms of risk. However, offering different products separates the two. Okay, for instance power is considered an inelastic good and is less sensitive to price changes (Keat, 2013). This means that if price increases people will still use this product because of its high demand. However, with the case of Ford their product is elastic since people can buy cheaper cars. They both must adhere to government regulations or be subjected to high fines and possible shutdown. The elasticity of demand is what separate the two companies although they share the same risks.