Question

Explain the two opposing forces --- cost reduction and adaptation to local markets --- that firms must deal with when they go global.

Answer 1

There is two opposing forces or strategies and these are helpful for organizations and help to deal with the global market.

The cost reduction strategy in which companies reduce the cost of their products and by this action increase their profit. every single decision in product development affects the product cost.

Adaption to local market means a process in which adopt or make changes in existing product or service according to the suitability of different customers or market.

Cost reduction strategy provides benefits for the organization as modification present sourcing, improve processes, energy-saving equipment, hiring processes, reduction in organizing expenditures, provide product alternative. and helps in increase in profit, productivity and improve standards to match the different global market. So firms used cost reduction to deal with the global market.

Adaptation to local markets helps for an organization where many types of adaptation help as their different expects legal or regulatory adaptation that helps to make compromise way in different business regulations of different countries, an adaptation of products and It needed to incorporate the taste, needs, cultural practices of the local region that leads to increase the sell of products, acquiring local companies helps to minimize the losses and company can learn better about the local market and increase the demand of the product in that region.

These opposite forces are helpful for compete and run business in the global market by different strategies.

*PLEASE RATE WITH A THUMBS UP *