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Copycat manufacturers risk P3

Forums › Ask CIMA Tutor Forums › Ask CIMA P3 Tutor Forums › Copycat manufacturers risk P3

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Ken Garrett.
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  • January 31, 2021 at 3:58 pm #608694
    petrjava
    Member
    • Topics: 3
    • Replies: 1
    • ☆

    Dear OpenTuition,
    I am struggling with assigning correct risk category to scenario when I produce certain products let’s say in Asia and the manufacturer copycat my product and sells it cheaper in Asia themselves. Please see relevant article in link below:

    https://www.engineering.com/story/what-should-we-do-about-copycat-manufacturing

    Would this be business, reputational or ethical risk to my business?

    Many thanks in advance!

    February 1, 2021 at 7:45 am #608726
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10591
    • ☆☆☆☆☆

    This is:

    1 A business risk because the copycat will be stealing some sales, impacting the profitability of the business.

    2 A reputational risk because the copycat product could be poorly made or even dangerous.

    There is no reason why an event cannot create more than one risk and the copycatting could even be a strategic risk because if the product is easy to copy reasonably well and is sold in a country with poor consumer protection or intellectual property laws, how will the business ever overcome it?

    I don’t see that ethics comes into it as the company is not being unethical – it is the copycat business which is.

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