Question

Explain the various external factors which lead to business risk?

Answer 1

• Strategic Risk: Out of all the kinds of business risk, strategic risk has the most implication it’s on reaching your desired goals. If a company strategy becomes less affective, objectives or not as easily met. This could be down to shifts in customer demand, new competitors, rising interest rates and other changes.

• Compliance Risk: Compliance risk refers to whether or not a company is complying with the laws and regulations that are applicable to the business and the country in which it operates.

• Financial Risk: All types of business risk tend to come with some sort of financial risk. This type of risk refers to the flow of money in and out of your company and the potential for financial loss.

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Answer 2

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Factors affecting business risk are numerous. It is important for all types of organisations to understand the different types of business risk that could affect their company. business risks, external business risks, the different business risk categories and how Sinnaps project management software can help you to effectively manage these risks.

business risks, external business risks, the different business risk categories and how Sinnaps project management software can help you to effectively manage these risks.

In order to identify business risk, it is crucial to understand the different types of business risk and their implications for the company. Let’s take a look at a list of business risks:

1) Strategic Risk: Out of all the kinds of business risk, strategic risk has the most implication it’s on reaching your desired goals. If a company strategy becomes less affective, objectives or not as easily met. This could be down to shifts in customer demand, new competitors, rising interest rates and other changes.

2) Compliance Risk: Compliance risk refers to whether or not a company is complying with the laws and regulations that are applicable to the business and the country in which it operates.

3) Financial Risk: All types of business risk tend to come with some sort of financial risk. This type of risk refers to the flow of money in and out of your company and the potential for financial loss.

4) Reputational Risk: Reputational risk can also be called client business risk and it refers to the potential for a damaged reputation. A damaged reputation Will result in loss of revenue and have other effects on the company.

5) Operational Risk: Any failure and your businesses day-to-day operations is known as the operational risk. This could be seen in a technical failure.

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