Benefits and Risks of Global Operations Flashcards
What is a key benefit of increased market reach in global operations?
Access to new and larger markets, increasing customer base and potential sales.
How do global operations achieve economies of scale?
By mass production and bulk purchasing, reducing per-unit costs.
What is diversification of risk in global operations?
Spreading risk across multiple markets to reduce dependence on a single market.
What is a major cultural challenge in global operations?
Language and cultural barriers causing communication issues.
Why are regulatory issues a risk in global operations?
Different countries have complex laws, and non-compliance can result in fines or legal actions.
How can political instability affect global operations?
It can disrupt supply chains, operations, and market conditions.
What are examples of economic instability risks in global operations?
Fluctuating currency exchange rates and regional recessions.
How can global diversification protect a business?
It buffers against regional economic downturns or local issues.
