The targeted sale of ABC is $ 3 million in three years where as currently the company's sales are 1.2 million. The company CEO is thinking to increase the sales by more than twice and as an entrepreneur this is an aggressive strategy which needs to be weighted in terms of its perceive risk factors. Following may be the factor which may affect the success of this strategy:
a. There is a risk that product might not be up to meet the expectations of a customers.
b. Change always face reluctance, the new product will be subject to the acceptability risk of a customer.
c. Risk of competition follows the launch of new product, may result in loss of market share by the company.
d. Production depends upon the factors of production, the new product requires a different raw material which is required to be purchased from outside supplier. To find the correct and cheap raw material for the product is also a major task for the company. Further the reliability in supply is crucial for the success of business
e. Impact of inflation on the profit of the product is a foremost problem which company might be facing in the upcoming years. Inflation is the key element which management fails to foresee and may result in price fluctuation.
f. Human resource is the vital part of product development and current human resource might not be able to meet the technical requirements of the new product. The company would be required to hire human resource for the new product. Finding right people is also a major risk for the company.