Question

Anticipating and managing risk is an important yet often overlooked aspect of developing sales plans. Explain the potential consequences of failing to incorporate a risk management plan. What risks might threaten the execution of a sales plan? Describe at least one risk in detail and develop a strategy for managing it.

Answer 1

Answer:

Anticipating and managing risk is an important yet often overlooked aspect of developing sales plans. This is correct statement that we generally overlook the risk associated with the sale plan. We generally do not plan a action plan to manage the risk associated with the sale plan.

Potential consequences of failing to incorporate a risk management plan: This will lead to below consequences as

• Risk will not be managed effectively: Due to lack of incorporate of risk management plan, the sale department will not be able to manage the risk observed in the sale plan and the risk will have adverse impact on the sales for the company.
• Impacts the sale plan: This lack of management of risks for sale plan will result in sale impacts and target sales will not be achieved by the sale department for the company.
• Investment without gain: Thus due to lack of risk management, the efforts and investment carried out by sale department will not be of any use and my result in no gain for the sale department.
• Loss of resources and time: If we cannot manage the risk properly, then it will have adverse impact on the sale process and it will results in loss of resources and time for the company.
• Costly affair for immediate arrangements for risk management: If we want to manage the risk, when the risk is observed, then it will call for lot of immediate arrangement and which will be costly affair for the company.

The risks that might threaten the execution of a sales plan is that low probability to achieve sales with high investment for execution of low probability sales plan. The risk threatens because one side we have very low probability to gain the sales and on other hand we have high investment or costly action plan for the sale plan. Thus low sale at high investment threatens the execution of sale plan.

One risk in sale plan: Sale plan of an international branded product like passenger cars, in the local regional market, without researching the paying capacity of the consumers in the given region.

Strategy: In order to manage the above stated risk, we need to develop a strategy to carry out the market research of the target regional market, so that we can understand the consumer behaviors and the paying capacity of the consumers, so that we can place our costly product in the market appropriately so that we can gain reasonable sales against our sale plan.