What Are the Potential Problems with Global Expansion

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The Answer is There is likely to be a high degree of both economic and political risk. This is likely to be especially true if a firm expands into emerging markets or countries with different legal structures. It is very tempting as returns tend to be much higher in these countries. It is a question of balancing the risk of investment with the potential returns. Sometimes a firm may try to expand too quickly and may not have the necessary finance, personnel, expertise and operational issues to cope with it. Furthermore, expansion into new markets may detract from the domestic markets. Also, when a firm moves into another market, it is important that research has been undertaken, as customers in the new market will be different from those in the domestic markets. Tastes, fashions, preferences will vary, so market research is necessary and can be very expensive.

What Are the Potential Problems with Global Expansion

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What Are the Potential Problems with Global Expansion

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