ABSTRACT
This chapter outlines how project risks are identified and aligned with business strategy. It introduces the important concept of strategy formulation and its role in developing business and project objectives. Business strategies are matched with relevant project strategies through a set of business and project values. They can be aligned in a hierarchical or cyclical approach. Business/project strategy is further aligned with project risk strategies for the dual purpose of value-protecting and value-creating. A range of project risk response strategies is identified to prevent the loss of business value or realise the opportunities that project risks can provide. Guidance was provided by well-known frameworks such as Porter's dimensions of cost-leadership, differentiation and focus, and the product analysis of stars, cash cows or dogs of the Boston Consulting Group. Value is created by projects in the context of the organisation's mission and business needs and is defined in business terms such as increased revenues and market share, and improved customer satisfaction.
