Page 161 - CRC_One Report 2021_EN

Business Overview and Performance Corporate Governance Financial Statements Enclosure

2. Strategy & Objective-Setting
The Company has a strategic planning process into which integrates the risk management principles,
develops strategies, and sets business objectives to align with the risk appetite.

3. Performance
The Company identifies and assesses risks that may affect the accomplishment of strategies and business
objectives whereby the risks will be prioritized according to the level of impact and probability of events
that can cause risks as well as determines appropriate risk response methods.

4. Review & Revision
The Company regularly reviews its performance results to consider how effective the organization’s risk
management is as well as reviews the risk management for continuous improvements.

5. Information, Communication, & Reporting
The Company has in place an information system that enhances risk management efficiency. Such system
will help support risk information, performance data, and risk management reporting to continuously and
appropriately communicate the risk management results to the stakeholders.

2.2 Risk Factors Affecting the Company’s Business Operations

2.2.1 Risks in Central Retail’s Business Operations

The Company analyzed the risk in business operations by considering the objectives, policies, strategies and
nature of business operation and identified current and emerging risks in the next 3-5 years. The most important risks
for Central Retail’s business operations are as follows:

(1) Competition Risks

The retail industry is a highly competitive free market. Although, Central Retail is one of Thailand’s biggest retailers,
Central Retail currently competes with global and local players or even in the future, which mainly focus on
physical stores or online channels, whether their businesses are department stores, specialty stores, supermarkets,
hypermarkets, home décor stores, electronics stores, convenient stores, digital retail stores, catalogue trading and
online markets. Each store of Central Retail has to compete in the store location, product types, product prices,
fast and convenient for delivery service including sales through physical and online stores as well as all kinds of
services to cater any changing of customers behaviors. Most competitors of Central Retail are domestic traders.
Although, the compititors have to spend a lot of investments to create a network of stores and plazas
or offer products that meet a variety of customer spending, similar to what Central Retail does, this is not only factor
preventing other operators from being in competition with Central Retail. However, more international retailers whose
share the same strong points as Central Retail may enter the market in which Central Retail operates.
Some competitors may have advantages in accessing the fund sources, economies of scale or cheaper products
from supplier that lead to lower costs or more effective managements, resulting in such competitors having
business advantage over Central Retail. Moreover, the brand owners and suppliers that once distributed
its products to the markets via retailers similar to Central Retail did, may plan to open their own store or directly
sell products to end consumer. As a result, Central Retail’s competitive advantage would lessen in offering
a variety of brands, especially in case that Central Retail holds the right as the brand’s sole distributor.

Annual Report 2021 (Form 56-1 One-Report) 161