Business Exposed To Risks
1. Market Risk
2. Credit Risk
3. Operational Risk
Market Risk: Market risk is referred to as decline in value of investment over a given period of time due to economic slowdown, policy changes or any other event that may impact the market.
Credit Risk: Credit risk is basically an investment risk of lose incurred from borrower’s default.
Operational Risk: Operational risk arises from failed or inadequate internal process, people or any other external event.
If we take latest example of Kingfisher Airlines, I would consider it exposed to primarily operational risk and secondary market risk.
Primarily Operational Risk is because since it’s inception in 2006 it has never made any profit and in-spite of that extra services have been provided continuously, without strengthen it’s presence in domestic market and gaining experience in aviation industry, it has been opened for international routes and etc.
Secondary Market Risk because of rise in fuel prices and taxes, however these are valid for all aviation industry but other companies are still making profit. So I have consider these elements as secondary.Check the Sybase Wiki @ sybasewiki.com