Assignment:
Could you provide your feedback to these International Strategy questions below?
Positive Risk
1. My example of a positive risk is that I forecast a certain level of sales but run the risk of underestimating. If I underestimate (especially for a new product) and sales are double what I expected that would be a positive risk, but the negative is that I may not have the capacity to meet that demand? Some of the negative risk is lost sales and future and/or customer retention, (i.e. loyal customer/repeat customer) and companies grapple with this risk constantly when they are determining inventory and staffing, but are these the only things effects by this risk?
Risk Response
2. "Handling risk" which is also "risk response" is mentioned as a part of our risk management plans. Risk response is with respect to determine how we are going to handle the identified risk whether it is corporate, project, tactical or operational. The following are the ways we can choose to address risk:
Mitigating Risk
- Reducing the likelihood an adverse event will occur.
- Reducing impact of adverse event.
Transferring Risk
- Paying a premium to pass the risk to another party.
Avoiding Risk
- Changing the project plan to eliminate the risk or condition.
Sharing Risk
- Allocating risk to different parties
Retaining Risk
- Making a conscious decision to accept the risk.
If a risk is of a high probability and impact you have to do something about it and then do another "Risk Identification and Assessment". Why is this and although avoiding risk is an option, can we really avoid risk?
Political Risk
3. Although one can easily see why political risk would exist in the host country but what about political risk in the home country? Although an argument can be made that there is little or no risk in the home country of a company but does that hold true even if the home country is the US? What are the political risks in the home country?