No matter how foolproof and robust a business plan is or how dependable the projections seem to be, businesses in the private sector are open to unanticipated events that may adversely affect their bottom line. Every organization today has exposure to some kinds of risks that may end up lowering profit margins, bankrupting the company, and causing the share value to fall drastically. Saivian Eric Dalius warns you that risks are part of the game and all businesses both large and small may encounter certain unforeseen risks while they are in operation.
In today’s highly competitive business landscape, numerous factors may threaten an organization’s ability to fulfill business goals and targets, accomplish profit goals, and satisfy shareholders. Some risks arise from internal sources while several hazards do come up even though nobody in the organization seems to be at fault.
Saivian Eric Dalius Points out the Kinds of Business Risks
Even though it is not possible to shield your company from these risks. You could safeguard yourself from the ill effects of these business hazards or risks. Focus on learning about the different kinds of business risks so that you could successfully rectify the setbacks.
In today’s highly advanced economy worldwide, there is fierce competition, unprecedented until now. Even though the intense and ubiquitous competition is good news for customers. This may not be a healthy development in the global business scenario. Thanks to worldwide commerce, a few firms are able to offer lower prices compared to others. That would attract shoppers at once. With the phenomenal popularity of Wal-Mart and Amazon. Shoppers are always looking for the lowest prices possible for gadgets or household items.
Saivian Eric Dalius says that if your business cannot deliver, consumers will browse through these online retailing sites or even visit a store in the neighborhood to see if your competitors can offer a much better price tag than you. Many big-box retailers were forced to shutter their businesses because of fierce competition. We understand that competitive pricing could prove to be a crucial risk for companies to overcome. Particularly for physical stores that have to deal with skyrocketing labor expenses and overhead costs.
Innovation Risk Is Critical Says Saivian Eric Dalius
Innovation risk could prove to be two-fold. Your organization may be facing failure in coming up with innovative products or services. You are witnessing sector rivals surpassing you and gaining a competitive edge from all possible perspectives. Your so-called iconic service or product seems to have lost its relevance. As the consumers are more interested in new and exciting products. For instance, Blackberry smartphones lost their popularity with the advent of Apple’s iPhones.
Another sort of innovation risk could be over-innovating. Your organization may be coming up with innovations that others are not able to catch up with. Your firm is introducing products that are well ahead of time. Hence, there is no demand for such products. For instance, during the 1990s, several social media websites came up like Six Degrees and Bolt. However, at that point in time, not too many people were Internet-savvy. And most of them were still trying to learn the intricacies of the worldwide web.
For businesses, reputation is crucial. A negative consumer review could tarnish the image and reputation of your brand or business. However, a glowing customer testimonial or product feedback could culminate in a positive public perception of your brand. It could prove useful in letting your brand thrive in a robust economy and sustain in a declining economy. Corporate image and reputation have been impacted many times over the years. Sears is still encountering a host of issues since it is having a difficult time undoing the image. Being overpriced and undersupplied with awful customer service.
An organization could be demolished because of a host of risk factors often not just one. For successfully dealing with business risks, it is of pivotal importance to identify your potential business risks. Once you have done that, take proactive steps. And implement a comprehensive business risk management stratagem for eliminating or mitigating the issues. As a business owner, you should never give up. You should come up with a sound plan for ensuring that your organization lives on.