Business Risk

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  • Created by: Jess
  • Created on: 01-12-12 17:22
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  • Business Risk
    • What is a risk?
      • The possibility of incurring losses or the possibility of incurring gains
      • A circumstance or an outcome that may have an impact of a business
    • Types
      • Quantifiable Risk
        • The outcome can be measured.
        • e.g. the loss of sales, loss of profits
      • Unquantifiable Risk
        • Something unexpected occurs
        • e.g. the possible impact of the image of a business if the product is unsuccessful.
    • Risk Management
      • The plans that a firm puts in place to manage risk
      • The aim being to control & minimise threats to profits, production, personnel, reputation etc
    • The process
      • Identify potential threats and likelihood of this occurence
      • Take appropriate action to prevent or address most likely threats
      • Review existing operations
      • Draw up contingency plans
    • Examples of ways to reduce & control risk
      • Regular fire checks
      • Using different currencies
      • Having two suppliers
      • Stockpile raw materials
      • use external bodies


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