What are the Challenges of Geographical Diversification?
While geographical diversification offers numerous benefits, it also presents several challenges:
Cultural Differences: Understanding and adapting to different cultures can be challenging. Misunderstanding local customs and consumer behavior can lead to poor market performance. Regulatory Compliance: Navigating the regulatory environment in different regions can be complex and time-consuming. Logistical Issues: Managing logistics, supply chain operations, and distribution networks across multiple regions can be daunting. Increased Costs: Expanding into new regions often involves significant investment in infrastructure, marketing, and human resources. Currency Risks: Fluctuations in currency exchange rates can impact profitability.