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BUSINESS RISK
M A R K E T I N G C O - O P
YOU WILL BE ABLE TO….
• Identify the 3 types of business risk
• Explain how risk affects business decisions
• Identify ways that businesses can protect
themselves from risk
BUSINESS RISK
• Risk if the uncertainty of an outcome
• Three types of risk for businesses:
–Economic
–Natural
–Human
ECONOMIC RISKS
• The risk that an
endeavor will be
economically
unsustainable
• Can include:
–Changes in
demographics
–Business cycle
–Competition
–Government
NATURAL RISKS
• Probability of harm to human health,
property or the environment posed by any
aspect of the physical world other than
human activity
• Can include:
–Perishability
–Weather
–Fires
HUMAN RISKS
• Risks related to the actions
of those inside and outside
the company
• Can include:
–Employee theft or
incompetence
–Accidents
–Shoplifting
–Fraud
–Computer-related crime
IMPACT ON PROFITS
• Economic:
– Loss of potential consumers
– Product/Service popularity may end quicker than expected
– Competition may increase and you could lose customers
– Increased regulations could prevent certain business
practices or production
• Natural:
– Loss of goods = loss of profits
– Damage of goods/resources
• Human:
– Loss of goods/resources
– Injuries
– Lawsuits
HOW CAN BUSINESSES
PROTECT THEMSELVES?
• Risk Management
– The identification, assessment, and
prioritization of risks followed by
minimizing and controlling the
probability of unfortunate events
HOW CAN BUSINESSES
PROTECT THEMSELVES?
• Against Economic Risks:
– Conducting constant research to stay ahead of
the curve
– Staying up to date with regulations
• Against Natural Risks:
– Can be more difficult that others
– Implementing safety measures (sprinklers, fire
extinguishers)
• Against Human Risks:
– Conducting background searches on employees
– Implementing security measures (cameras,
internet security)
– Providing safety training for employees
REVIEW
• What are the types of business risks?
• What are examples of each?
• How can companies prevent each type of risk?
BUSINESS RISK
ASSIGNMENT
1. Complete Business Risk worksheet
2. Complete Business Risk Case Study
assignment
3. Present case study findings next class.

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Business Risk.pptx

  • 1. BUSINESS RISK M A R K E T I N G C O - O P
  • 2. YOU WILL BE ABLE TO…. • Identify the 3 types of business risk • Explain how risk affects business decisions • Identify ways that businesses can protect themselves from risk
  • 3. BUSINESS RISK • Risk if the uncertainty of an outcome • Three types of risk for businesses: –Economic –Natural –Human
  • 4. ECONOMIC RISKS • The risk that an endeavor will be economically unsustainable • Can include: –Changes in demographics –Business cycle –Competition –Government
  • 5. NATURAL RISKS • Probability of harm to human health, property or the environment posed by any aspect of the physical world other than human activity • Can include: –Perishability –Weather –Fires
  • 6. HUMAN RISKS • Risks related to the actions of those inside and outside the company • Can include: –Employee theft or incompetence –Accidents –Shoplifting –Fraud –Computer-related crime
  • 7. IMPACT ON PROFITS • Economic: – Loss of potential consumers – Product/Service popularity may end quicker than expected – Competition may increase and you could lose customers – Increased regulations could prevent certain business practices or production • Natural: – Loss of goods = loss of profits – Damage of goods/resources • Human: – Loss of goods/resources – Injuries – Lawsuits
  • 8. HOW CAN BUSINESSES PROTECT THEMSELVES? • Risk Management – The identification, assessment, and prioritization of risks followed by minimizing and controlling the probability of unfortunate events
  • 9. HOW CAN BUSINESSES PROTECT THEMSELVES? • Against Economic Risks: – Conducting constant research to stay ahead of the curve – Staying up to date with regulations • Against Natural Risks: – Can be more difficult that others – Implementing safety measures (sprinklers, fire extinguishers) • Against Human Risks: – Conducting background searches on employees – Implementing security measures (cameras, internet security) – Providing safety training for employees
  • 10. REVIEW • What are the types of business risks? • What are examples of each? • How can companies prevent each type of risk?
  • 11. BUSINESS RISK ASSIGNMENT 1. Complete Business Risk worksheet 2. Complete Business Risk Case Study assignment 3. Present case study findings next class.