Risk Related Guides
Risks
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Competitive risk is the potential for actions of a competitor to negatively impact your business. In a healthy competitive market, competitive risk drives improvements such as cost reductions and quality improvements. The following are common examples of competitive risk.
PricingSteep discounts by a competitor can be a significant threat to a business, particularly a business that has a higher cost than the competition. Discounts may be driven by excess inventory due to supply/demand issues or as a aggressive pricing strategy that sparks a price war.InnovationInnovation by a competitor can threaten a firm's entire business model.
LocationsA competitor who opens a location next to yours or who secures a better location. In some cases, competition close by isn't a bad thing as it can attract more customer traffic.ResourcesA competitor who is viewed as a more attractive employer may result in a loss of skilled resources.PromotionA competitor's promotion may attract your customers away. In some cases, a competitor's promotion may directly or indirectly paint your brand or products in a negative light.
DistributionA competitor may achieve a preferred position with your distribution partners such as retailers.Intellectual PropertyA competitor may secure key intellectual property that is important to current and future products.
Risks
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