Question

Johnson Food Products believes that as far as its products are concerned, tastes vary worldwide and so it has to customize its product offering, marketing strategy, and business strategy to differing national conditions. Johnson Food Products' ability to increase its profitability and profit growth by expanding globally is constrained

Multiple Choice

due to customer surplus.

due to the dispersion of individual value creation activities.

due to the leveraging of skills developed in foreign operations.

by the economies of scale.

by the imperative of localization.

Answer 1

Option 5
Localization is a strategy used by firms where in order to increase profitability, firms customize goods or services that matches tastes and preferences in different international markets. So when there are substantial differences across nations with respect to tastes and preferences, it becomes challenging for firms to cope with the local needs as for a global firm it would be following the global standards which may not be accepted by other nations.