Risk-Response Matrix

The Risk-Response Matrix is a 2x2 matrix used to evaluate and manage risks in a business. It is used to identify and prioritize risks based on their likelihood and potential impact.

At a very high level, the Risk-Response Matrix is used in the context of business, risk management.

Risk-Response Matrix quadrant descriptions, including examples
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What is the Risk-Response Matrix?

A visual explanation is shown in the image above. The Risk-Response Matrix can be described as a matrix with the following quadrants:

  1. High Likelihood & High Impact: Risks that have a high likelihood and a high impact should be addressed with a proactive response, such as conducting market research.
  2. Low Likelihood & High Impact: Risks that have a low likelihood and a high impact should be addressed with a reactive response, such as creating a contingency plan.
  3. High Likelihood & Low Impact: Risks that have a high likelihood and a low impact should be accepted, such as a minor delay in a project.
  4. Low Likelihood & Low Impact: Risks that have a low likelihood and a low impact should be ignored, such as a minor typo in a document.

What is the purpose of the Risk-Response Matrix?

The Risk-Response Matrix is a 2x2 matrix used to evaluate and manage risks in a business. It is used to identify and prioritize risks based on their likelihood and potential impact. The matrix helps businesses identify which risks should be addressed first and which risks can be accepted or ignored.

The Risk-Response Matrix is divided into four quadrants, each representing a different risk-response strategy. The top-left quadrant is for risks that have a high likelihood and a high impact, and should be addressed with a proactive response. The top-right quadrant is for risks that have a low likelihood and a high impact, and should be addressed with a reactive response. The bottom-left quadrant is for risks that have a high likelihood and a low impact, and should be accepted. The bottom-right quadrant is for risks that have a low likelihood and a low impact, and should be ignored.

For example, a business might identify a risk that a new product launch will fail due to a lack of customer interest. This risk would be placed in the top-left quadrant, as it has a high likelihood and a high impact. The business should then take a proactive response to this risk, such as conducting market research to better understand customer needs.


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What templates are related to Risk-Response Matrix?

The following templates can also be categorized as business, risk management and are therefore related to Risk-Response Matrix: Effort Impact Matrix, Gap Analysis Matrix, Growth Share Matrix, Kraljic Matrix, Outsourcing Matrix, Quadrant Analysis, Risk Analysis Matrix, Risk Value Matrix. You can browse them using the menu above.

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