RISK MANAGEMENT

 

Issue

 

Organisations that increase their business activity, which may include sourcing, production, or distribution, or indeed all of these, increase their exposure to business risk. This is particularly so in a buyer’s market for goods and services, which contributes to an increasingly pressured risk environment. Here we’ll look at the risks posed by competitors, customers and suppliers and provide an insight on how they may be managed.

 

Solution

 

Your competitors always pose a risk to your organisation but no more so than in a buyer’s market. Virtually every business has competitors. However, if competitors, both current and potential, pose a significant threat to your organisation then your viability is at risk. Just how may they pose a risk to your organisation? They may:

 

• Open up nearby or start marketing aggressively to your client base.

• Significantly reduce their prices.

• Be first to market with a new or improved product.

• Find ways of getting their product to market quicker.

 

Some strategies for managing such risks include:

 

• Continue to build on your relationships with your existing customers. You need to ensure you are continuing to provide the product and/or service they need. Having an excellent working relationship with your customer will also mean that they will provide you with useful intelligence about your competitor and more likely to ask you first when it comes to new or enhanced products and/or services.

• Invest money in the development of new products and/or services. Being ahead of the competitor is key to mitigating the risk they pose in this area. Understanding what is happening in terms of industry trends, looking for quicker delivery of your products and/or services to your customer, and looking to deliver new or enhanced products and/or services before your competitor is a useful risk mitigation strategy.

• Continually monitoring your competitors including their prices. Look for trends or changes in their activity levels that may provide an indicator to a serious challenge to your market share.

• Make sure you protect your trademarks, designs, copyrights or patents by registering them where possible. At the same time, you need to ensure this makes financial sense as, especially in a rapidly developing market, developments may have moved ahead faster than it takes to complete the registration process.

 

These are just a guide to the sort of generic strategies you may consider. As with all things, there will be some very specific strategies that may be developed that are germane to your own business. At Park Advisory we understand that thinking of relevant strategies may be easier for someone not directly involved in the organisation and would be more than happy to assist you in a strategic risk management plan that covers all sources of risk germane to your organisation. Please do email us at info@parkadvisory.uk for a free, no obligation initial consultation.