Risk involves the probability of an outcome negatively impacting individuals or an organization. A risk involves three factors: objectives, effects, and uncertainty. For instance, an organization could have an objective, say, introducing a new design of an AirPod, which it thinks will function better than current models. The effects that impact this objective can include customer preferences. Varied customer preferences create uncertainty; hence the risk that the product might not sell as well as the company predicted. Therefore, a firm should conduct a risk analysis to understand how to manage the uncertainty. Market research analysts are essential in helping businesses understand the concept of risk and conducting analysis to assist the company in avoiding or handling uncertainty.
As an aspiring market research analyst, understanding risks, such as getting inaccurate survey answers from target clients, is essential in helping run marketing roles smoothly. Incorrect answers about customer preferences are a significant risk in market research because they will mislead the firm’s decision-making and could lead to potential failure. The firm should have a solid risk management strategy to handle such cases. Risk management allows firms to realize benefits like cost-effectiveness and improved decision-making (Naik 28). Having identified this risk, the market research analyst should devise ways to mitigate the risk and advise the company accordingly. For instance, the firm could produce a few AirPods at first and give them to their target clients to test the product. The firm should then use the feedback to release the product or modify unwanted characteristics. Despite risks involving uncertainties that could negatively impact a business, market research analysts are essential in helping companies manage them.
Chubb Limited is an insurance company that assesses, assumes, and manages risks. The company faces various threats, including operational and financial uncertainties, for which it has employed different countermeasures. Chubb faces operational risks such as infrastructural failure or third-party issues such as cyber-attacks or security breaches, which could cause losses and reputational damages or disrupt daily functions (Chubb 27). The company has established a risk and finance committee to manage such risks. The committee reviews processes and controls concerning operational and information technology and assesses emerging uncertainties that could significantly impact the company (Chubb 2). Reviewing current measures and evaluating possible risks helps the company mitigate operational risks in time to prevent significant damage when they occur. Chubb also has administrative and technical controls to minimize the risk of cyber incidents and protect information technology and assets through due diligence security reviews (Chubb 27). Thus, Chubb has a high-quality risk management strategy for its operational risks, as evidenced by the measures to prevent and mitigate them.
Moreover, Chubb faces financial risks like poor investment performance that could affect its financial and business performance. Fluctuation of interest rates and inflation pose possible investment risks to Chubb’s finances (Chubb 24). The company mitigates such threats by using professional management firms to make investments, which must conduct activities according to the company’s Risk and Finance Committee guidelines. The committee periodically reviews asset allocation ranges and material guidelines and promptly informs the Board of new allocations or modifications in current ranges (Chubb 3). Frequent reviews allow the company to know its current financial position and potential changes that could pose a risk. Therefore, Chubb has a quality financial risk management system, which it conducts through its Risk and Finance Committee.
Chubb. “Chubb Limited – Financials – SEC Filings.” Investors.chubb.com, 2023, https://investors.chubb.com/financials/sec-filings/default.aspx. Accessed 18 Oct. 2023.
Chubb. CHUBB LIMITED RISK & FINANCE COMMITTEE CHARTER. https://www.chubb.com/content/dam/annual-corporate-governance/2022/Chubb%20Limited%20Risk%20and%20Finance%20Committee%20Charter.pdf Accessed 18 Oct. 2023.
Naik, Sankalp, and Ch V V S N V Prasad. “Benefits of Enterprise Risk Management: A Systematic Review of Literature.” GATR Journal of Finance and Banking Review VOL. 5 (4) JAN-MAR. 2021, vol. 5, no. 4, 29 Mar. 2021, pp. 28–35, https://doi.org/10.35609/jfbr.2021.5.4(3).