Competitive Advantage and Business Activity

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What is the primary focus of 'downside risk' in the context of risk management?

Competitive advantage in a business

Potential gain or profit

Possibility of loss or adverse outcome (correct)

Uncertainty in a situation

What is the essential characteristic of risk in a situation?

Uncertainty in the outcome (correct)

Inevitable outcome

Potential for gain or loss

Predictability of the outcome

Which of the following types of risk involves the possibility of both loss and gain?

Upside risk

Pure risk

Downside risk

Speculative risk (correct)

What is the learning outcome of understanding the concept of risk assessment in internal control environment?

To mitigate the possibility of loss Signup and view all the answers

Which of the following statements is true about risk?

Risk is inherent in every situation Signup and view all the answers

What is the likely outcome of a business focusing on low-risk activities?

Resulting in a low ability to obtain competitive advantage Signup and view all the answers

A company producing cars with high technology smart driver sensor features is an example of what type of competitive advantage?

High activity – High Competitive advantage Signup and view all the answers

What is the recommended approach for a business with high activity and high competitive advantage?

Examine the activity carefully due to high risk Signup and view all the answers

A company producing mobile phones with various colors to attract customers is an example of what type of competitive advantage?

Low activity – Low Competitive advantage Signup and view all the answers

What is the primary goal of risk management in an organization?

To be a proactive process and an integral part of strategic management Signup and view all the answers

What is essential for achieving a sound system of risk management and internal control?

Embedding the risk management and control framework into the culture, processes, and structures of the company Signup and view all the answers

What is a key objective of risk management in generating high returns?

To gain a competitive advantage over other organizations Signup and view all the answers

What is a key benefit of risk management in achieving a competitive advantage?

Improved financial performance Signup and view all the answers

How does risk management contribute to a business's competitiveness?

By enabling the business to adapt to changing market conditions Signup and view all the answers

How does risk management help businesses achieve a competitive advantage in the market?

By enhancing the business's ability to respond to changing circumstances Signup and view all the answers

What is a key driver of competitiveness in risk management?

The ability to adapt to changing market conditions Signup and view all the answers

How does risk management contribute to a business's competitiveness in the long run?

By enabling the business to achieve a sustainable competitive advantage Signup and view all the answers

Competitive Advantage and Business Activity

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