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CMA Final · Entrepreneurship and Startup · Risk Management Strategies

A founder lists possible threats to her food-delivery startup and plots each on a grid, with the likelihood of occurrence on one axis and the size of financial impact on the other. Which risk tool is she using?

She is using a risk heat map, also called a probability-impact matrix. It positions each threat by how likely it is and how large its financial effect would be, which allows the founder to rank risks and decide which ones to treat first.

  1. ARisk heat map (probability-impact matrix)Correct
  2. BBreak-even chart
  3. CCash flow statement
  4. DPorter's value chain

Explanation

Plotting risks by likelihood and impact on a grid is the probability-impact matrix, also called a risk heat map. It helps prioritise which risks need treatment first. A break-even chart relates costs to volume, a cash flow statement tracks cash movements, and a value chain analyses activities.

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