ECONOMIC RISK MANAGEMENT To learn how to manage economic risks Key Learnings from the Video 1. Economic Risk The economic/investment risks occur due to changes in business conditions or government policies and this is called economic risk. There are two types of economic risk: i. Macroeconomic Risk This refers to the risk arising due to global economic changes such as economic policy changes by the US, UK, etc. This type of risk occurs due to the factors that are outside the control of a country and impact your business operations in that country. ii. Microeconomic risk This refers to the actions/events in your country that affect your business operations. For example, if you are in steel trading business, then fluctuation in the price of the steel is a microeconomic risk. This type of risk affects the foreign operations of your company. Economic risks can "suddenly make your business unsustainable." For example, Jet Airways' business was advers...
Objective To learn about the reputation risk Key Learnings from the Video 1. Concept of Reputation Risk The loss of a business/brand’s reputation is known as reputation/reputational risk. The following are the consequences when the brand name of a business gets spoiled: Decreased sales Declined market share Reduction in the social capital (Value of brand on social media platforms) Reputation risk causes loss to business from all aspects. Businesses have to struggle for a long time to gain the lost reputation. For example, a few years back Maggi lost its reputation and was even banned and was away from the market for a long time. The reputation loss also caused loss to its parent company Nestle and also created a challenge for its future in the country, and this resulted into changes in the top management of Maggi. 2. Reasons of Reputation Risk a. Product Failure It means the product is not up to the mark as per customers’ expectations or the commitments which you made while...
Objective of the E-BOOK To learn about the stock market risk Key Learnings from the Video 1. Meaning of Stock Market Risk The term investment itself means risk because the return on investment is always a thing of concern. When an investor is investing in the Stock Market he/she taking a risk as an investment in the shares of the company may not mean high returns, this can also lead to a loss. 2. Types of Risks The various types of risks are: a. Systematic risk Systematic risk is the risk that arises due to the fluctuations in the stock market of the country in which you are investing is known as systematic risk. For example, if an investor is investing in the Indian stock market, then his/her investment can be at risk according to the movement/fluctuations in the stock market (like National Stock Exchange, Bombay Stock Exchange, etc.). Systematic risk cannot be covered because it is caused due to a particular system which is in place. The various situations whi...
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