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Chapter 10




               1.3  Why incur risk?




                                                  Incur risk?







                                 Gain
                                                                            Increase
                            competitive                                financial return

                             advantage





                                  To generate higher returns a business may have to take more risk
                                   in order to be competitive

                                  Not accepting risk tends to make a business less dynamic, and
                                   implies a ‘follow the leader’ strategy

                                  Incurring risk also implies that the returns from different activities
                                   will be higher – ‘benefit’ being the return for accepting risk

               Benefits can be:


                    financial – decreased costs

                    intangible – better quality information.

               In both cases, these will lead to the business being able to gain competitive
               advantage
























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