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Example 1 for Strategic RiskA firm might decide to expand into a new country. The strategic risk refers to the possibility that the expansion does
Example for Strategic RiskA firm might decide to expand into a new country. The strategic risk refers to the possibility that the expansion does not prove to be profitable or successful. The reasons why the expansion could fail might fall under different categories, such as political or regulatory risk, exchange rate risk, people risk....Example In the early s some insurers made the strategic decision not to hedge their exposure to stock market movements arising from their portfolios of variable annuity products. The strategy paid off for several years. In the economic crisis left those insurers with a risk management crisis as the guarantees began to bite and the income stream diminish.
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