Carphone Warehouse 2009 Annual Report Download - page 27

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Directors’ Report – Business Review
Group Risks and Uncertainties
Specific risk Potential impact Mitigation
Going concern Insufcient funding affects ability to
continue trading.
Banking facilities currently provide substantial
headroom, and do not start to mature until
2012, providing signicant time before
renancing is necessary.
Competitive
environment
Loss of market share and erosion of margins
from increased competition.
Our strategy is to reinvest the benets of scale
into our customer proposition – to keep barriers
to entry high and to maximise value for our
customers. We have continued to see market
share gains as a result of this strategy.
TalkTalk brand
perception
Weak customer retention as a result of poor
customer service.
We have continued to make signicant
improvements in customer service, and expect
our substantial investment in new CRM systems
to enhance service further in the year ahead.
Capacity and
functionality of
network
infrastructure
Failure to provide a reliable service causes
customer churn.
We focus continuously on improving network
resilience and performance, and continue to
invest to ensure that we keep pace with
customers’ growing demands.
Capacity and
functionality of I.T.
infrastructure
Failure to provide adequate service levels or to
manage back ofce processes.
In addition to our substantial investment in
CRM systems for TalkTalk Group, we have
continued to invest to improve the functionality
and resilience of our other front and back
ofce systems.
Exchange rates Prots adversely affected by exchange rate
movements; value of assets and liabilities
similarly affected.
Exchange rate exposures have been reduced
signicantly in the year: our exposure to
Swiss Francs has been materially eliminated
following the repatriation of our brand
management company; our exposure to other
European currencies has also reduced as a
result of the sale of half of our non-Sterling
businesses to Best Buy.
www.cpwplc.com 23
Directors’ Report –
Business Review
Group Risk and Business Assurance
functions identify, evaluate and manage
the risks the Group faces on an ongoing
basis. The table below summarises the
more material risks to the Group, and
how we seek to mitigate them in the
day-to-day running of the business.