Summary of Taking Advantage of Risk

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Taking Advantage of Risk summary
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Rating 

8 Overall

8 Importance

8 Innovation

8 Style

Recommendation

While many companies can adequately plan for foreseeable risks, they tend to be far less effective when it comes to preparing for unpredictable challenges such as cyberattacks, natural disasters or political upheavals. Yet these risks, which are bound to become more frequent in an increasingly volatile and complex world, can wreak havoc on businesses. getAbstract recommends this timely and engaging article from professionals at the Boston Consulting Group to executives looking to reinforce their corporate risk control strategies and capabilities.

In this summary, you will learn

  • Why companies often fail to control the fallout from unexpected shocks,
  • How firms can taken proactive steps to limit unexpected risks and
  • What businesses can do to shore up their risk profiles.
 

About the Authors

Takashi Mitachi, Tad Roselund and Meldon Wolfgang are senior partners and managing directors at the Boston Consulting Group.

 

Summary

Companies that plan for unusual or hard-to-predict threats wield a “risk advantage” that puts them one step ahead of their competition. Instead of putting risk management on the back burner, these firms oblige managers throughout their organizations to take proactive steps to contain risk fallout. For example, JGC, a Japanese construction company, drew lessons from problems it experienced in its early efforts to penetrate emerging markets back in the 1970s. To mitigate escalating costs, contractual disputes and other issues, the company now takes steps that include hedging its currency risk, mastering the intricacies of a foreign country’s real estate and contractual laws, and choosing local partners that can help the firm succeed within that nation’s system. Shoprite, the biggest grocery firm in Africa, faces challenges in operating 1,000 outlets across 15 nations, including dealing with local regulations and stalled deliveries. Despite these obstacles, the company has increased the number of its stores by 100% and grown revenues significantly since 2010 by cultivating relationships with local farms and businesses in its supply chain.

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