Corporate Risk & Valuation · Entry 04 of 71

What Is Strategic Risk?

The consequence of flawed decisions and ineffective planning

Core Definition

Strategic Risk refers to the possibility of a company's failure to achieve its business objectives due to flawed or ineffective strategies.

Key Drivers

1. Can result from poor strategic planning, market changes, or competitive pressures: Failing to anticipate technological shifts or entering the wrong market segment.
2. Affects the company's long-term success and growth: This can make a firm obsolete or permanently destroy enterprise value.