Risk
Management
Competency:
Marketing I
#95- Explain the nature and types of risk to businesses
"Risk comes from not knowing
what you're doing."
- Warren Buffett
What is “Risk”…as related
to business??
Probability of damage, loss, injury,
or liability associated with
activities of a business operation
What is Risk Management?
CONTINUOUS PROCESS where
businesses identify risks, assess
risks, and develop strategies to
manage risks to the business.
Types of Risks
Economic
Property
Liability
Economic Risks
Results in financial loss
Examples:
• Demographic changes with labor base
• Economy and business cycle changes
• Competition
• Natural Disasters
• Human Risks (shoplifting/embezzlement)
Property Risks
Financial loss occurring as result of
personal or business property(including
buildings, vehicles, or money)
Examples:
• Fire
• Theft
• Forced sale of property
• Loss of rental income
Liability Risks
Potential for loss incurred to
others resulting from use of
product or service or business
operations of the company.
Examples:
• Amusement parks/rides
• Snow and ice covered walks for
businesses
• Products causing unintended
injuries/death (faulty products or
equipment)
Risk Management and The Falcons Nest
Class Activity
Students work in small groups to identify three risks to the student based
enterprise. Student apply the risk management process and create a PPT
presentation that outlines their recommendations. 50 Point Assignment.
I.
Identify the Risks
II.
Assess the Risks
III.
Create Strategy to Minimize
IV.
Manage/Control the Risks