Failsafe Strategies: Profit and Grow from Risks That Others Avoid

Chapter 2. Three Steps to Design a Low-Risk Strategy

	“If you do not know where you are going, any road will lead you there.”
	--Anonymous

To avoid risks, you need to understand where the risks are, their exact nature, and what you can do to control them. Reviewing our three risk categories, demand risk represents the risk that customers will not buy the firm's product or service at the expected level.^[1] Competitive risk represents the risk that competitors can imitate what your firm does and take your customers away. Capability risk represents the risk that your firm may not be able to deliver the value to your customers and capture some of the value for your shareholders.

We recommend a three-step process to identify and mitigate these three ...