How does globalization impact businesses?

Globalization significantly impacts businesses by fostering integration and interdependence across global economies. This means that businesses are no longer operating in isolation; instead, they are interconnected with markets, suppliers, and consumers around the world. As companies expand into international markets, they can access larger customer bases, diversify their product offerings, and benefit from economies of scale.

This integration leads to the sharing of resources, technology, and information, which can enhance operational efficiencies and drive innovation. Moreover, companies can leverage comparative advantages by locating production in countries with lower costs, thus optimizing their supply chains and potentially improving profitability.

The other options reflect misconceptions about globalization. For instance, globalization often expands the market for local companies by enabling them to sell products internationally rather than limiting them. While it can lead to more complexity in operations, the essence of globalization is that it encourages businesses to adapt to a broader market rather than complicate their processes to a singular environment. Lastly, globalization typically increases competition among local businesses, as they face not only local competitors but also those from foreign markets.