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© W.R. Knechel Types of Strategic Risk Macroenvironmental /Industry Political Technology Social Economic Suppliers Substitutes New Entrants/ Competitors Customers A. Discuss SWOT, the company’s Strengths/Weaknesses – Opportunities/Threats. B. The first step in Strategic Risk Analysis is to perform a External Threat Analysis. This involves identifying and assessing the risks confronting the business from external forces. These potential risks are typically categorized as either industry and macroenvironmental forces. Michael Porter categorized these industry forces into 5 categories: suppliers, customers, substitutes, new entrants and current competitors. Macroenvironmental forces include: Political, Economic, Social, and Technological pressures known as the PEST factors. Competitors are a significant source of risks. There is always the possibility of a superior product arising or new entrants pricing aggressively. Consider the discount airlines and their effect on traditional airlines. Netflix, Redbox
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