What could result from solely focusing on local responsiveness without considering cost structure?

Focusing solely on local responsiveness while neglecting cost structure can lead to higher operational costs. This happens because a company may tailor its products or services specifically to meet local consumer preferences, which often requires additional resources, such as unique materials, specialized labor, or extra marketing efforts that cater to local tastes. These adaptations can significantly increase production and operational expenses.

When a firm does not balance its strategy with cost considerations, it may find itself incurring costs that exceed the additional revenue generated from increased local sales. As a result, although it may gain short-term sales through local customization, the overall financial health of the company can deteriorate due to the unsustainable cost structure created by the focus on local responsiveness alone.