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Competitive Risk
These risks involve marketplace strategy and positioning.
- Greater Competition: Increasing market share will provoke competitors to fight back. Solution: That's business. Prepare for battle.
- Hard to Sustain: Effects of some growth tactics - more advertising, price cutting - don't last long. Solution: Don't rely on one tactic. Combine. Try a fresh idea or a twist on old ones. Be creative.
- Low Profitability: Digging for new sales can offer diminishing returns on greater effort. Solution: Consider new products, features or markets. Or consider structural growth strategies.
- Over-Extension: New product lines may involve new technologies, shipping methods, regulations or sales methods that take up staff time. Solution: Shorten the learning curve. For instance, hire a temporary executive or consultant. Designate internal experts and send for training. Outsource non-core functions.
- Dissimilar Markets: New markets may not respond the way others did. Solution: Test market before committing substantial resources.
- Unfamiliar Markets: You may be short on expertise with new products or new markets. Risk is high. Solution: Big capital outlay may be necessary to hire expertise. Finance with new equity rather than existing cash flow. Consider a separate company. New business plan is a must.
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