Cost of going global may be more expensive
Businesses operating in a global market place may generate more sales and revenue from operations. However, majority of international business are finding that global operations come at an enormous cost. Some even find the cost exceeds benefits of a global operation.
Cost of doing business outside borders comes from many aspects of the operation. Adopting a product to suit a particular new market could be higher. Product even may have to be reengineered to comply with local laws, withstand to climate and environmental issues. If the business is manufacturing the product in the home country, then there will be added cost for shipping, handling, insurance, logistics and other costs. Many do not expect to benefit from economies of scale when they are getting into international markets. Unlike the local market, there will be a considerable lag when trying to address rapidly changing market conditions. Any product modifications to suit the new market will add to the cost of doing business and add to time horizon. Managing overseas sales outlets and any production facilities will require additional staff or will create more demand on the existing staff. Travel could affect employee morale. Above all there may be barriers to trade and other aspects of your business.
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