The marketing department of a large manufacturing company has been asked by the board of directors to start formulating a strategy to expand sales into a completely new and growing market. The company has not been active in the market to date because of the perceived high risk of the new market. In the past, the board had always avoided higher-risk activities, so the boards request took the marketing manager by surprise. In response to the boards request, the marketing manager came up with the following risk map. The darkened circle represents the perceived risk of the new project.

Based on the marketing managers risk map, which of the following would be most likely to be the marketing managers strategy concerning the risk? a) b) c) a Decline the boards request based on the high probability of the risk.

b Minimize the companys exposure and closely monitor sales and costs.

c Transfer the risk by entering into a marketing joint venture with a company that is currently operating in the area.

d) Accept the risk and then hope all ends well.

Risk Map 9 8 7 Monetary Impact 3 2 1 1 2 3 4 5 6 7 8 9 Frequency/Probability