Risk factors of business plan

If, for example, Wal-Mart strategically positions itself as a low-cost provider and Target decides to undercut Wal-Mart's prices, this becomes strategic risk. The second form of business risk is compliance risk.

ANNUAL REPORTS 2011

This type of risk arises in industries and sectors highly regulated with laws. The wine industry, for example, must adhere to the three-tier system of distribution, where it is a requirement for a wholesaler to sell wine to a retailer, who in turn sells it to the end consumer. Wineries cannot sell directly to retail stores. However, there are 18 states that do not have this type of distribution system, and compliance risk arises when a brand fails to understand the individual requirements and becomes noncompliant with state-specific distribution laws.

The third type of business risk is operational risk. This risk arises when the day-to-day risks of a company fail to perform. HSBC, for example, faced operational risk and a heavy fine when its internal anti-money laundering operations team was unable to adequately stop money laundering in Mexico. Any factor a argumentative essay jokes reputation is ruined, either by one of the previous business risks or by something else, it plans the risk of losing customers based on a lack of brand loyalty.

Potential Risk Factors in a Marketing Plan

To avoid the headaches of entry, consider these six factors: The first and most important question you must answer is whether local consumers in the target market can afford to buy your products or services and if you can you sell them at a competitive price. It's irrelevant that you sell the highest quality products or services if target consumers simply don't have sufficient purchasing power to buy them. Just because Africa, for example, is home to six of the ten fastest-growing economies in the world doesn't mean it offers great business opportunities for makers of expensive consumer cover letter for assistant principal jobs.

Average personal incomes there remain low compared to developed markets. Analyze a market's consumers, demographics, and competitive landscape.

Toshiba Investor Relations : Business Risk Factors

Understand your own cost structures chemistry essay prompts the foreign markets. Consider tailoring your product to local demands or tastes. McDonald's, a company that has experienced breathtaking international success, is famous for customizing its menus to local demand: In seafood-loving Hong Kong, for example, McDonald's offers a "shrimp burger.

You will need to be flexible and adaptable to seize the target market's business opportunities.

Consider whether to enter the new market with a partner or not. Going it alone brings additional risks for the middle market company.

Initiating a joint venture with a local partner who is deeply risk with the target market is often the best alternative. Selecting the business partner is crucial, however, so take your time and think carefully before committing to any plan. Since middle market companies tend to have less bargaining power compared to large enterprises, they may find themselves particularly at factor in dealing with unethical partners or intractable government agencies.

Research potential barriers to entry in the target market, including "soft barriers" such as language and culture, and more business-centric ones such as inadequate infrastructure roads, ports, etc.

In recently booming Brazil, for example, infrastructure is sub-par and transport costs are very high, especially in the north. As a recent Economist report noted"Brazil's infrastructure is decrepit.