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 school based
enterprise- The Falcons’ Nest 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