Question

Consider industry characteristics which influence the level of competitiveness and impact performance results among Krispy Kreme and its rivals. What elements in the external environment present long-term risks for the company?

Answer 1

Answer:

There are three types of external risk factors: Economic risk, natural risk and political risk, they come up due to economic events that arise from outside the corporate structure.

Explanation:

Economic risk:  includes changes in the market conditions

Natural Risk: includes natural disasters that affects natural business operations e.g.: earthquakes for example may affect the ability of a retail business to remain open leading to a sharp decline on overall sales for the month.

Political risk: Changes in the political environment or governmental policy that relate to financial affairs.  For example: increases in interest rates, changes in export or import laws, taxes increase among others.