The document discusses business risk and provides examples. It defines business risk as the possibility of profits or losses due to uncertainties or unexpected events. Business risk is influenced by numerous factors like sales, costs, competition, economic climate, and regulations. The objectives of managing business risk are to avoid not meeting targets and protect reputation. Some causes of business risk mentioned are changes in competition, demand for products, human factors, and government policies. The document notes that business risk can result in high profit or loss depending on the risk factors and provides an example of Nestle's Maggi facing sales decreases due to rumors before recovering.

1. Presented By : Subha Jha

2. Index
1. What is Business
2. What is Business Risk
3. Objectives of Business Risk
4. Cause of Business Risk
5. Does business risk makes profit or loss
6. Case study on business risk

3. What is Business
 Business is the organized effort of individuals to produce
and sell, for a profit, the goods and services that satisfy
society's needs.
 There are three key characteristics that must be met to
have a business i.e.
• First, businesses must be the result of individuals
working together in an organized way.
• Second, businesses must satisfy a societal need.
• Third, businesses must seek to make a profit.

4.  For example, a grocery store
satisfies the need to be able to
purchase food for ourselves and
our families.
 Another example of satisfying a
societal need is a gas station that
provides needed fuel for most
cars to operate.

5. What is Business Risk
 It refers to the possibility of
sufficient profits or even
losses due to uncertainties or
unexpected events.
 Business risk is influenced by numerous
factors, including sales volume, per-unit price,
input costs, competition, the overall economic
climate and government regulations.

6. Objectives of Business Risk
 Does not Allow to Complete the Set targets within the
stipulated time.
Failure of given time to complete the target, hence a
threat to reputation.

7. Cause of Business Risk
1.Competition :-> When business have strong competitors
in the market and the manufactures indulge in cut throat
by cutting down the price of the goods or by producing
cheaper quality of the product, which is great hazard for
business.
Here the big example is
Reliance Jio vs Airtel.

8. 2.Change in demand for the product :-> If there
is a sudden change in demand for a certain product
can create a business risk.For example, when
Samsung introduces S-III mobile it certainly
affected the market for apple in many country.
3.Human causes of business risk :-> Business loss
may also occur due to theft, forgery, lavish
expenditure and top heavy management.

9. 4.Change in government policies :-> It is unavoidable for
business.If a sudden change comes in monetary and fiscal
policies of government which is not favorable for business
will lead to loss.

10. Does business risk makes profit or loss
 It can make a very high profit or loss.
 Depends on the factor of the risk.
 If taken a high risk and succeeded then it will be a great
profit otherwise a great loss.
 Eg. – As you know Nestle Company had produced a large
stock of Maggi but suddenly rumors spread that it failed
FSSAI Standards and the sales decreased, but later Nestle
succeeded in its risk as Maggi passed the FSSAI Standards.

11. Case study on business risk