Tactical Risk

Tactical Risk

Tactical Risk Jonathan Poland

Tactical risk refers to the potential for losses due to changes in business conditions in real-time. Tactics differ from strategy in that they involve immediate, short-term actions taken in response to current conditions. In contrast, strategy is a long-term plan for achieving specific goals or objectives. Tactical risk is therefore associated with present threats and is focused on addressing immediate challenges rather than long-term conditions.

Tactical risk is an important consideration in risk management, as it involves addressing risks that are imminent or already occurring. This can involve developing and implementing strategies to mitigate or prevent these risks, as well as having contingency plans in place to respond to unexpected events. By effectively managing tactical risk, organizations can minimize the potential impacts of short-term disruptions and ensure that they are able to continue operating smoothly. The following are a few examples of tactical business risks.

Credit Risk
A bank extends an unsecured line of credit to a large electronics firm based on the company’s healthy financial condition. A few months later, the electronics company suddenly issues a press release saying that they have discovered unidentified accounting irregularities that will have a material impact to its financial condition. Based on the press release, the bank identifies the credit line as a high risk account and freezes it before more withdrawals can take place.

Market Risk
A farmer reconsiders plans to plant her fields with corn when prices drop on the futures market.

Information Technology Risk
A bank uses a series of network routers that are identified as having a major security vulnerability. They quickly develop a plan to address the vulnerability by rerouting traffic and patching the routers.

Competitive Risk
A solar panel manufacturer receives news that their biggest competitor is ready to commercialize a new type of solar cell that has a high conversion efficiency and is inexpensive to manufacture.

Marketing Risk
An airline releases a new ad campaign with a catchy slogan. A popular internet meme suddenly appears that makes fun of the slogan and suggests that the company has poor customer service. The company quickly ends the campaign in response.

Health & Safety Risk
A company is contacted by three employees from the same office location who say that they have been diagnosed with a communicable disease. The company quickly contacts all staff who work at the location to inform them of the situation and to ask that they work from home for the rest of the week.

Legal Risk
A concert promoter in Japan receives news that a typhoon is heading towards their outdoor summer event. The promoter decides to cancel the concert despite the high costs of refunding tickets in order to avoid legal risks associated with injuries from the typhoon.

Tactics vs Strategy
Tactics and strategy are both military terms. Military organizations primary view tactical risk as the conditions on a battlefield. An army may identify strategic risks before a battle but tactical risks can only be identified as they unfold.

Learn More…

Pricing Strategies Jonathan Poland

Pricing Strategies

Pricing strategy involves deciding on the right prices for a company’s products…

Willingness to Pay Jonathan Poland

Willingness to Pay

Willingness to pay (WTP) is a measure of how much a customer…

Channel Pricing Jonathan Poland

Channel Pricing

Channel pricing refers to the practice of setting different prices for a…

Data Asset Jonathan Poland

Data Asset

A data asset is any data that is expected to produce future…

Cyber Security Jonathan Poland

Cyber Security

Cybersecurity is the practice of protecting computing resources from unauthorized access, use,…

Knowledge Value Jonathan Poland

Knowledge Value

Knowledge value is the value that is derived from knowledge, skills, and…

Hyperinflation Jonathan Poland

Hyperinflation

Hyperinflation is a situation in which there is a rapid and significant…

Strategic Partnership Jonathan Poland

Strategic Partnership

A strategic partnership is a relationship between two or more organizations that…

Physical Capital Jonathan Poland

Physical Capital

Physical capital refers to the tangible assets that are used to produce…

Jonathan Poland © 2023

Search the Database

Over 1,000 posts on topics ranging from strategy to operations, innovation to finance, technology to risk and much more…

What is a One Stop Shop? Jonathan Poland

What is a One Stop Shop?

A one stop shop is a business that offers a wide range…

Bliss Point Jonathan Poland

Bliss Point

The concept of a “bliss point” refers to the amount of consumption…

Relationship Building Jonathan Poland

Relationship Building

Relationship building is the act of establishing and maintaining social connections with…

Decision Automation Jonathan Poland

Decision Automation

Decision automation refers to the use of technology to automate the process…

Media Infrastructure Jonathan Poland

Media Infrastructure

Media infrastructure refers to the technologies, services, facilities, and outlets that are…

Schedule Risk Jonathan Poland

Schedule Risk

Schedule risk refers to the risk that a strategy, project, or task…

Quality Metrics Jonathan Poland

Quality Metrics

Quality metrics are measurements that are used to evaluate the value and…

What is a Tagline? Jonathan Poland

What is a Tagline?

A tagline is a short, catchy phrase that is used to summarize…

Influence Jonathan Poland

Influence

Influence is the ability to have an impact on the thoughts, behaviors,…