The geographically diversified firm must learn to ensure that the benefits of being international outweigh the added infrastructure costs.

Question

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As a geographically diversified firm expands its operations internationally, it incurs additional infrastructure costs such as establishing subsidiaries, hiring local staff, complying with local regulations, and adapting to local market conditions. However, the benefits of being international, such as access to new markets, diversification of risks, and greater competitiveness, can outweigh the added costs if managed properly. Therefore, the firm must learn to balance the costs and benefits of internationalization to achieve sustainable growth and profitability.

The Geographically Diversified Firm Must Learn to Ensure That the Benefits