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Strategy - Risk management
Risk management is about:
- Identifying what and how things can and might go wrong
- Understanding the potential effects if things go wrong
- Devising plans to cope with the threats
- Putting in place strategies to deal with the risks either before or after their occurrence
Some good examples of risk management include:
| Functional Area |
Risk Management Action |
Marketing |
Avoid over-reliance on customers or products
Develop multiple distribution networks
Test marketing for new products |
Operations |
Hold spare capacity
Quality assurance & control |
Finance |
Credit insurance to protect against bad debts
Investment appraisal techniques |
People |
Key man insurance – protects against loss of key staff
Rigorous recruitment & selection procedures |
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