Managing Business Strategy Risk
(Read our white paper on “Managing Business Strategy Risk”)
CFOs use insurance, hedging, and financial derivatives to manage hazard risks (like natural disasters and lawsuits) and financial risks (like interest-rate and commodity-price fluctuations). But these risk-management techniques are inappropriate for managing business strategy risks, the uncertainties associated with market forces like competitors’ moves, macroeconomic conditions, and deregulation. The StratLab simulator can help:
- Realistically quantifies a range of strategy risks to your business
- Facilitates discussion about business-strategy risks. StratLab provides a common language for describing complex strategies and scenarios. It allows experienced managers to deal with unfamiliar scenarios and accelerates learning for new staff.
- Helps you develop contingency plans for responding to potential crises and opportunities.
StratLab gets its analytical power by combining computer simulation, genetic algorithms for optimization, and cross-sectional research on business strategy and performance.
It can also quantify the risk profile of potential acquisition candidates. StratLab does all these things quickly and accurately, without placing undue strain on your resources. And it’s a “best practice” that can be an important part of your investor relations program.
In the end, the real value of StratLab is that it integrates risk management and strategic planning. Aligning the two functions causes them to focus on events and strategies that really matter. The benefit: a better mix of “expected” results and risk, and thereby an increase in the projected total returns to your company.