Page 134 - Microsoft Word - 00 P1 IW Prelims.docx

Chapter 10
 Product risk.
 Commodity price
risk
 Product reputation
risk
 Credit risk
 Currency risk
 Interest rate risk
 Technology risk
 Economic risk
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The risk that customers will not buy new products (or
services) provided by the organisation or that the sales
demand for current products and services will decline
unexpectedly.
Businesses might be exposed to risks from unexpected
increases (or falls) in the price of a key commodity.
Some companies rely heavily on brand image and
product reputation, and an adverse event could put its
reputation (and so future sales) at risk
Credit risk is the possibility of losses due to non-
payment, or late payment, by customers
Currency risk, or foreign exchange risk, arises from the
possibility of movements in foreign exchange rates, and
the value of one currency in relation to another
Interest rate risk is the risk of unexpected gains or
losses arising as a consequence of a rise or fall in
interest rates
This arises from the possibility that technological change
will occur.
This refers to the risks facing organisations from
changes in economic conditions, such as economic
growth or recession, government spending policy and
taxation policy, unemployment levels and international
trading conditions