Question

Describe the additional risks undertaken by firms pursuing a focus strategy

Answer 1

The below are the additional risks undertaken by firms pursuing a focus strategy:

1. In the focus strategy the uniqueness plays a major role for the company, when the company fails to provide the uniqueness then that affects their profit and growth which would develop financial risk to the organization.

2. The focus strategy more involve into the core competency of the business which affects the competitiveness of the business in the market and that would be the major risk for the company where there is increased competition and it develop risk in the market rate.

3. When the firm adapt to focus strategy it impact on the cost, value etc where the firms should always differentiate on the products and services or else they would lose their customers in the market.

4. The company should always have the capabilities to provide specialised products and services, so the company needs to invest more on technology, innovation etc and if the technology fails then it risk the business operations.