I am going to use a metaphor involving the board game of Monopoly to illustrate how I feel about risk management. The players compete to win by either having more money when the game ends (if there is a time limit) or by being the only one left standing after all the others have gone bankrupt. Let’s imagine our executive team is playing a game against its main competitors.
Risk can be simply defined as the potential that an activity will lead to an undesirable outcome. Financial risk, put plainly, is the possibility that an investment’s return will be different than expected. The standard method of reducing financial risk is diversification. Mitigating marketing risks is no different; diversification through investment in integrated marketing tactics is crucial.
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