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How to create and sell NFTs
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Most companies only examine the most direct risks facing a company and tend to neglect secondary risks that can have an even greater impact.
Companies need to learn to evaluate aftereffects that could weaken whole value chains.
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Risk analysis focuses all too often only on direct threats. The classic domino effects linked to supply chains include
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Considering the impact of a risk on a company and how it propagates through the valued chain can help management think through the change. For example, the risk posed by carbon regulation on the aluminum industry.
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The most complex domino effect is the responses from customers.
The shift in buying patterns can create a typical cascading effect. Another is changed demand levels.
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Indirect risks can also hide in distribution channels. It may include the inability to reach the end customers, new distribution costs or redefined business models.
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But those who routinely examine the way risks propagate across the entire value chain are better prepared for second-order effects.
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All differences in business models can create the potential for competitive risk exposure. This does not mean that a company should imitate its competitors, but that it should consider the risk when they have different strategies.
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