Competitive advantages can spring from intellectual property, brand recognition, or even a company’s talent pool and whether protected by law or secret sauce (i.e. Coca-cola), this can help the business as it puts a stamp of exclusivity on it. Of course, legal protection doesn’t mean what you do is relevant or necessary to the market. Many companies have trademarks, copyrights, and patents even at the small business level, which never amount to competitive advantage.
The bottom line is failure to foresee and manage risk is not smart business. The market economy demands risk management. From tech security to legal compliance to financial risk, here are the key impact areas:
(i) Digital, the infrastructure and architecture helps rationalize data and use it as a key strategic asset;
(ii) Operational, fail to manage non-financial risks and suffer impacts which can be even more serious financially than typical-financial risks. Manage these risks with company-wide tactical solutions;
(iii) Regulatory, new laws and regulation can cut across every industry and are becoming more detailed, extraterritorial, and the consequences of non-compliance more severe;
(iv) Workforce, growth changes company culture — fail to adjust with scale and face higher switching costs and profit stagnation.