Question

One of the primary disadvantages of the global strategy and worldwide product divisional structure is that:

a. it is difficult to respond effectively to local market needs and preferences.
b. achieving economies of scale with this strategy/structure combination is nearly impossible.
c. the firm must develop centers to offer after-sales service to customers.
d. it is difficult to achieve economies of scale.

Answer 1

Answer: b

Explanation:

This strategy and world wide product divisional structure may hinder economy of scale( whish is actually the reduced costs enjoyed by business entities due to the scale of their business) typically, this strategy and organizational structure restricts products to certain region which the demand may not be enough for effective cost management to enhance profit.

Other divisions might have some demand for certain products that are not available in their own division.