Question

Which of the following is NOT a positive result from expanding business globally?

	A.	Potential for new markets
	B.	Increase creativity
	C.	The ability to attract and retain global talent
	D.	Increase shipping cost
	E.	Expand the product life cycle

Answer 1

Answer: D (Increase shipping cost)

Rationale: When companies expand their business on a global scale, the company gains the benefit of acquiring new potential customers globally and entering new markets and competing with rivals on a global level.

As the companies start expanding globally, the creativity and innovation of organizations and its employees also increases.

Also, it opens opportunites to attract and hire new international employees with better skills

As the products enter new markets, the life cycle of product extends as the overall number of customers for the product increases and as the product enters new markets.

One of the disadvantages of expanding globally is that companies and customers face increased shipping costs when products are shipped from manufacturing plant to different countries which increases the final cost of the product.