Thursday, June 22, 2017

Quantitative  Risk Assessment vs Qualitative Risk Assessment

Market cannibalization - Market cannibalization is the negative impact of a company's new product on the sales performance of its existing and related products. It refers to a situation where a new product "eats" up the sales and demand of an existing product, potentially reducing overall sales, even if sales of the new product are increasing.

After a detailed study of the market, if the risk assessment team of a mobile company turns up with a high probability of market cannibalization for their recent product due to the upcoming product, it is an example of Qualitative Risk Assessment.

After the Qualitative Risk Assessment, if the team drills down deep and comes up with a percentage stating that 25 % of our in stock mobiles are at risk due to the launch of the upcoming product. This is an example of Quantitative  Risk Assessment.

Risk Analysis using Delphi Technique

Risk Categories,
Photo credits: Fonna Seidu

Risk response
Photo credits: Fonna Seidu



Delphi technique is a structured communication technique

  • Project manager will identify the Delphi team
  • Delphi team might be located in different geographical regions

Class Practice
  1. Individuals identify the risk in a project
  2. Use a sticky note to enter one risk per head
  3. Risk Analyst will categorize the risks
  4. Based on the new enlightened view of the risks, use another sticky and come up with a risk response

    Categorised Risks

    Risk Response based on categorized Risks
Benefits


  • Identify Blindspot in a project
  • Avoids group thinking
  • Inputs from subject matter experts from different geographical areas
  • Avoids in-person meetings 
Demerits

  • Delphi technique consumes a lot of time