Risk often has negative connotations. Interestingly enough, there is opportunity in risk. When businesses conduct risk assessments, there is often an aura of avoidance. For example, what to do if X or Y goes wrong and how to handle it—how to avoid X or Y. Risk consists of the uncertainty surrounding a condition or event that can have positive or negative effects on an initiative (Weaver, 2008).
The building blocks of risk consist of:
Uncertainty v Variability
Accuracy v Precision
Chance v Probability
Normal distribution curves
Standard deviations
(Weaver, 2008)
Risk in marketing is perceived as the possibility of generating losses ( Deng & Ahmad, 2022). This definition has two sides - losses by action or lack of action. There is an opportunity within the lack of action, whereas action with potential losses requires a mitigation strategy. In marketing, losses can be experienced through ineffective projects or not taking on a project (opportunity loss) - failing to take the proper action to reach the target. Check out our article, How Do You Manage Risk, to learn how to manage risk.
Deng, C., & Ahmad, M. T. (2022). Research on Marketing Management Risk Decision Model Based on LINEST Function. Security and Communication Networks, 2022, 1–10. https://doi.org/10.1155/2022/9658148
Weaver, P. (2008). The meaning of risk in an uncertain world. Paper presented at PMI® Global Congress 2008—EMEA, St. Julian's, Malta. Newtown Square, PA: Project Management Institute.
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