Managing Financial Risks Within Event Industry Essay

Managing Financial Risks Within Event Industry - Essay Example The methodology revolved around a survey of past and recent literature on financial risk management in the event industry. The study found out that cost-cutting measures and strategic investment are key strategies that feature in many of the risk management methods in literature. Introduction The element of risk in the event industry is one of the factors that continue to attract the concern of managers, financial analysts, and financial managers. The industry is one of the most challenging in the sense that it concerns itself with fluid and flexible systems that are dependent on uncertain realities in the field of investment (Robinson, Wale, & Dickson, 2010). As such, the event industry has a higher element of risk when compared to the other industries. Many companies have suffered significant losses, drops in financial positions, and even permanent closures due to the unpredictable and risky aspects of the industry (Raj, & Musgrave, 2009). The element of risk arises due to multiple factors including hostile operating environments, rising costs of logistics, changing preferences of the clients, and adverse regulatory practices (Pelham, 2011). In order to shield themselves against the adverse effects of the global markets, many players in the industry have devised various financial management strategies that range from cost-cutting measures to enhancement of the efficiency of processes within the industry. Some of the financial management strategies have proved highly effective while others fail to produce significant results in terms of reducing the element of risk (O'Toole, 2002). However, the dominant methods of risk management are related to the need to develop both long term and short term strategies that can help revamp the state of the economy in ways that are both effective and strategic (Robinson, Wale, & Dickson, 2010). The methods employed by the different companies often serve as the competitive advantage as they enable the companies to operate at h igher levels of profitability in ways that safeguard against negative effects on the business environment (Anderson, 2010). As such it becomes necessary to regard the operations of these companies within the manner in which they enable the determination of value and other systems of performance. Renowned companies in the event industry such as 3D Exhibits, Aspen, BroadStreet, Event Marketing Strategies, and EWI World Wide have managed to survive adverse market conditions through a range of strategies that enhance and strengthen their internal systems. In order to survive inflationary pressures and the effects of competition, some companies have changed their ways of operation by diversifying into various fields. Companies have added the range of services as a way of increasing the flow of revenues while reducing the overheads incurred in the running of the business processes (Robinson, Wale, & Dickson, 2010). As such, it becomes important to consider the fact that most of the strate gies connected with the objective of lessening the element of risk are determined in accordance with the type of the event company. Other determinants are the level of competition, the nature of the market, and other external and internal factors that relate to the determination of performance within the industry (Robinson, Wale,