BDO Releases List of Top 20 Risk Factors Among U.S. Technology Companies
BDO has generated a list of the top 20 risk concerns of U.S. technology companies.
Part of the 2010 BDO RiskFactor Report for Technology Businesses, the list was compiled after an analysis of the risk factors reported in the fiscal year 2009 10-K SEC filings of the 100 largest publicly traded U.S. technology companies.
Interestingly, this year there’s a tie for the number one risk. Nearly all (94 percent) of the companies studied cited “competition and consolidation in technology sector” and “failure to develop or market new products/services” as risk concerns.
It’s also worth noting a few dramatic increases in this year’s list. First, companies’ concerns associated with properly executing corporate strategies jumped significantly –that risk factor was cited by 68 percent this year, compared to only 27 percent in 2009 and 52 percent in 2008.
Secondly, labor concerns doubled, increasing to 49 percent, compared to 22 percent in 2009 and 26 percent in 2008.
Where did supplier risk fall in this ranking? BDO reports that risk associated with “U.S. and foreign supplier/vendor concerns” was cited by 75 percent of the companies’ studied, making it number nine on this year’s list –up from number 10 last year.
Here is the full list:
2010 Rank
1. Competition and consolidation in technology sector 94% (2009 Rank: 1)
1T. Failure to develop or market new products/services 94% (2)
3. U.S. general economic conditions 93% (6)
4. Changes to Federal, State and Local regulations, including tax 88% (9)
5. Management of current and future M&A or divestitures 86% (4)
6. Risks associated with international operations 83% (3)
6T. Inability to attract or retain personnel, including management 83% (8)
8. Legal proceedings 80% (11)
9. U.S. and foreign supplier/vendor concerns 75% (10)
10. Intellectual property infringement 74% (5)
11. Failure to properly executive corporate strategy 68% (27)
12. Product liability, quality and safety issues 64% (15)
13. Predicting customer demand 63% (12)
14. Cyclical revenue (and resulting fluctuations in stock price) 57% (7)
15. Pressures on pricing, margins and cost cutting 56% (17)
16. Inability to acquire capital or financing 55% (19)
16T. Natural disasters, war, conflicts and terrorist attacks 55% (14)
18. Accounting, internal controls and Sarbanes-Oxley compliance 54% (13)
19. Labor concerns 49% (28)
20. Credit or financial risk of customers, vendors, suppliers 48% (23)
