Question

What are some of the primary risks and barriers that Dr. Tasty Donuts might encounter when expanding its business internationally?

A) Cultural differences and language barriers may hinder effective communication and understanding.

B) Currency exchange rate fluctuations could impact the company's financial stability and profitability.

C) Regulatory and legal differences between countries may pose challenges in complying with international business laws.

D) Competition from local businesses in the target country may reduce market share and profitability for Dr. Tasty Donuts.

Answer 1

When expanding internationally, Dr. Tasty Donuts may encounter risks such as cultural differences, currency fluctuations, regulatory and legal differences, and competition from local businesses.

Step-by-step explanation:

When expanding its business internationally, Dr. Tasty Donuts may encounter several primary risks and barriers:

1. Cultural differences and language barriers: These may hinder effective communication and understanding with employees, customers, and suppliers in the target country.
2. Currency exchange rate fluctuations: These could impact the company's financial stability and profitability, as revenues from sales in one currency may fluctuate when converted to the home currency.
3. Regulatory and legal differences: Compliance with international business laws and regulations can pose challenges due to variations between countries. Dr. Tasty Donuts will need to understand and conform to the legal framework and regulations of the target country.
4. Competition from local businesses: Local businesses may already have a strong presence and loyal customer base in the target market, which could reduce Dr. Tasty Donuts' market share and profitability. It is important for Dr. Tasty Donuts to analyze and understand the competitive landscape in the target country.