Uninsurable Risks

Competitors' actions

A new competitor may enter the market or a current competitor may introduce a new product. If a company is not prepared for these types of competitive actions, its share of the market can quickly decline.

Consumer Demand

Companies produce products that they think will meet consumer demand. They study customer needs and preferences. If they can predict a change in demand, they may be able to take advantage of the need with new products.

Uninsurable risk factors

Consumer demand, Competitors' actions,Technology changes, Local Factors, Business Operations

What are several things businesses can do to manage risks?

Inform everyone in the business of the types of risks that are particularly important to their part of the operations. Implement measures to gather information and spot possible problems. Inspect facilities and equipment. Be active in local communities. Build relationships with government officials.

Why do U.S. companies have difficulty enforcing intellectual property rights in some international markets?

Some countries do not enforce property rights laws that protect intellectual property, patents, trademarks, or copyrights, especially when the products of a foreign company are involved.

Business operations

The day-to-day operations of a business can have a major impact on its success or failure. A poorly run business will have higher costs, low morale, increased turnover, and a poor customer image. If managers and employees are not committed to the success of the company, they will miss opportunities to improve operations, increase customer satisfaction, and control expenses.

property rights

The exclusive rights to possess and use property and its profits

Local factors

The laws, regulations, taxes, and infrastructure of a local community can have an influence on the operations of a business. Some businesses decide to relocate from one state or country to another to get conditions that are more favorable. Businesses work with government officials and community organizations to keep a positive environment for business.

Technology changes

Anytime technology changes, there is a possible effect on a business. The cost of putting new technology in place is usually high, but if the business doesn't adopt the technology, it may lose sales.

Insurable risk

Businesses cannot insure many of the risks they face. To be insurable, the risk and amount of loss must be predictable

counterfeiting

Illegal uses of intellectual property, patents, trademarks, and copyrights.