Strategic Risk Management: Ensuring Long-Term Stability
Strategic Risk Management (SRM) is a process that helps companies predict and manage threats that could hinder the achievement of their long-term goals. In Georgia, characterized by a dynamic political and economic environment, strategic risks are particularly high. These can range from legislative changes (e.g., new labor codes or tax reforms) and geopolitical instability to currency fluctuations or the entry of a new, aggressive competitor. Unlike operational risks, strategic risks concern fundamental business decisions. Strategic risk management services enable management and investors to make informed decisions, reduce uncertainty, and turn potential threats into opportunities.
What Does This Service Cover?
Strategic risk management includes analytical and legal components:
- PESTLE Analysis: Assessment of Political, Economic, Social, Technological, Legal, and Environmental factors affecting business in Georgia.
- Regulatory Risk Forecasting: Analyzing expected legislative changes (e.g., during EU harmonization processes) and preparing for them.
- Market Entry Strategy: Assessing legal and business barriers when starting a new business or entering a new market.
- Competitive Intelligence: Legal analysis of competitors' actions and market trends.
- Scenario Planning: Developing "What-if" scenarios for various crisis situations (e.g., sharp devaluation of the Lari).
- Investment Protection Strategy: Structuring assets so they are protected from political or legal fluctuations.
Common Scenarios When You Need This Service
Strategic risk management is essential during the following decisions:
- Major Investment: A foreign investor plans to build a factory in Georgia and wants to know what legal guarantees they have from the state.
- Business Model Pivot: A company shifts from traditional sales to e-commerce and needs to assess risks of new regulations (e-commerce, data protection).
- Mergers and Acquisitions (M&A): Checking strategic compatibility and hidden liabilities when buying another company.
- Regional Expansion: A Georgian company expanding into neighboring country markets with different legal environments.
Georgian Legal Framework
Strategic risk management relies on a broad legislative base. Primarily, this is the Law of Georgia on Entrepreneurs, which defines corporate governance. Regarding investment protection, the Law on Promotion and Guarantees of Investment Activity is significant. Competition issues are regulated by the Law on Competition. Additionally, sector-specific legislation (energy, banking, pharmaceuticals) creates specific strategic risks that must be understood.
Process of Service Delivery
The service begins with a strategic session with company founders and directors to identify key goals. Consultants then conduct research on the external and internal environment. A "Risk Map" is prepared, where risks are ranked by probability and impact. A mitigation plan is developed for each high-priority risk. The process is cyclical—strategy is reviewed annually or upon significant environmental changes.
Why Legal.ge?
Strategic risk management requires vision that goes beyond daily operations. On Legal.ge, you will find business consultants and corporate lawyers with experience in strategic planning. They will help you see the big picture, calculate steps in advance, and make your business resilient to any change. Plan a future with mitigated risks with Legal.ge.
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