Which risk type describes the possibility that internal or external events may prevent achieving long-term strategic objectives and competitive advantage?

Which risk type describes the possibility that internal or external events may prevent achieving long-term strategic objectives and competitive advantage?

• A. Operational Risk
• B. Reputational Risk
• C. Strategic Risk
• D. Political Risk

Answer: (C)

Strategic risk is the risk that internal decisions or external events will prevent the organization from achieving its long-term objectives and maintaining competitive advantage. It captures uncertainties around how the strategy will perform in a changing environment—things like shifts in customer demand, disruptive technologies, new competitors, regulatory changes, or macroeconomic shifts that could erode expected benefits. This focus on long-term goals and competitive positioning distinguishes it from operational risk (day-to-day processes and failures), reputational risk (loss of stakeholder trust), and political risk (government actions or instability affecting operations).

Strategic risk is the risk that internal decisions or external events will prevent the organization from achieving its long-term objectives and maintaining competitive advantage. It captures uncertainties around how the strategy will perform in a changing environment—things like shifts in customer demand, disruptive technologies, new competitors, regulatory changes, or macroeconomic shifts that could erode expected benefits. This focus on long-term goals and competitive positioning distinguishes it from operational risk (day-to-day processes and failures), reputational risk (loss of stakeholder trust), and political risk (government actions or instability affecting operations).