What general types of risks can a business encounter?

The category of risks outlined, including operational risk, strategic risk, foreign exchange risk, and competition risk, encompasses broad areas that a business must navigate to ensure sustainability and growth.

Operational risk refers to risks arising from internal processes, people, and systems that could lead to loss or inefficiency. It is critical for businesses to manage these risks effectively to maintain their day-to-day operations. Strategic risk pertains to the potential loss that can occur due to the overall direction and decisions made by an organization, highlighting the importance of strategic planning in achieving long-term objectives. Foreign exchange risk involves fluctuations in currency exchange rates, which can significantly impact businesses engaged in international trade. Finally, competition risk addresses the external competitive landscape, requiring companies to be proactive in their market strategies to safeguard their market share and profitability.

This comprehensive view of risk captures essential aspects that businesses face, emphasizing the multi-faceted nature of risk management. By identifying and addressing these varied risk types, companies can strengthen their resilience and pursue strategic initiatives with awareness and preparedness.