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Risk Involved Strategic Management

The document discusses the key risks involved in strategic management including environmental risks from economic and market changes, competitive risks from intense competition and competitor reactions, operational risks from execution challenges and supply chain disruptions, financial risks from capital constraints and investment risks, reputation risks from public perception and brand image, regulatory and compliance risks from legal issues and ethical concerns, technology risks from cybersecurity threats and obsolete technology, human resource risks from talent shortages and resistance to change, and global risks from political instability and currency fluctuations.

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Kuldeep Bartwal Deep
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20 views

Risk Involved Strategic Management

The document discusses the key risks involved in strategic management including environmental risks from economic and market changes, competitive risks from intense competition and competitor reactions, operational risks from execution challenges and supply chain disruptions, financial risks from capital constraints and investment risks, reputation risks from public perception and brand image, regulatory and compliance risks from legal issues and ethical concerns, technology risks from cybersecurity threats and obsolete technology, human resource risks from talent shortages and resistance to change, and global risks from political instability and currency fluctuations.

Uploaded by

Kuldeep Bartwal Deep
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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THE RISK INVOLVED

IN OF STRATEGIC
MANAGEMENT
INTRODUCTION
Strategic management is a critical process
for achieving long-term organizational
success, but it also involves inherent risks
and challenges. Understanding these risks
is crucial for effective strategic planning
and implementation. Here are some of the
key risks associated with strategic
management
Environmental Risks

• Economic Factors: Economic


fluctuations, recessions, or unexpected
economic crises can disrupt strategic
plans and financial projections.
• Market Changes: Rapid shifts in market
trends, consumer preferences, or
technological advancements can render
existing strategies obsolete.
Competitive Risks

Competitor Reactions:
Intense Competition:
Competitors may respond
Fierce competition can
to strategic moves with
lead to price wars,
counter-strategies,
eroding profit margins
impacting the success of
and market share.
your initiatives.
Operational Risks

Execution Challenges:
Supply Chain Disruptions:
Difficulty in implementing External factors like natural
strategies as planned due to disasters or geopolitical
operational inefficiencies, events can disrupt the supply
resource constraints, or lack chain, affecting production
of alignment among and delivery.
employees.
Financial Risks

Capital Constraints:
Investment Risks:
Insufficient funding or
Investments in new markets,
inadequate financial resources
technologies, or products may
can hinder the execution of
not yield the expected returns.
strategic initiatives.
Reputation Public
Risks Perception: Brand Image:
A poorly Failure to
executed meet strategic
strategy or a goals can
decision that negatively
contradicts a impact brand
company's perception
values can and customer
damage its trust.
reputation.
Regulatory and
Compliance Risks

• Legal Issues: Failure to comply


with changing laws and
regulations can lead to legal
disputes, fines, and reputational
damage.
• Ethical Concerns: Strategies
that are perceived as unethical
can lead to public backlash and
regulatory scrutiny
Technology Risks

Cybersecurity Threats
Increasing reliance on
Obsolete Technology
technology exposes
Failure to adapt to evolving
organizations to
technologies can result in
cybersecurity risks,
competitive disadvantage.
including data breaches
and cyberattacks.
Human Resource Risks

Talent Shortages: Resistance to Change:


Difficulty in recruiting Employee resistance to
and retaining skilled strategic changes can
employees can impede hinder implementation
strategy execution. efforts.
Global Risks

Political Instability:
Operating in multiple
Currency Fluctuations:
countries exposes
Changes in exchange rates
organizations to
can impact the profitability
geopolitical risks, such as
of international operations.
political unrest or trade
disputes.
Overambitious
Goals

Setting unrealistic or
overly ambitious
strategic objectives can
demotivate employees
and lead to resource
allocation problems
Lack of Flexibility

Being too rigid in


adhering to a single
strategic plan can
make it difficult to
adapt to unforeseen
circumstances.
Measurement and
Evaluation Pitfalls
Inadequate measurement and
evaluation mechanisms may lead
to an inaccurate assessment of
strategy effectiveness, resulting in
misguided decisions
Failure to Communicate
and Engage
Poor communication of the
strategic plan to employees can
lead to confusion and lack of buy-
in, hindering execution
To mitigate these risks,
organizations must conduct
thorough risk assessments,
maintain flexibility in their
strategic plans, continuously
monitor progress, and be prepared
to adjust strategies as needed.
Effective risk management and
strategic adaptability are key to
navigating the challenges inherent
in strategic management.
Thank You

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