Domestic and global business environment covers entire factors inside the country of operation and it’s outside including those of production, marketing, finance and administration. A model business has two significant activities one is production or purchase of goods and services and the second one is its sale for profit. During that entire process whatever a company has to face at domestic and global fronts is its environment where it has to survive with other competitors. Domestic business environment
There is a difference between domestic and internal business environments. Latter is one where business operate like its management, staff, machines, building, furniture, fixtures, visitors, meetings, sitting arrangements, equipment, lighting etc and most of these factors are under full control of the business. The domestic business environment means the environment of the country where business is operating. It includes country’s climate, business policies, business facilities, business regulations and rules, logistic, political setup, style of governance, culture, traditions, belief system, economic system etc. Most of these factors are completely out of control of the business and it just has to be so vigilant to face them and update its procedures as and when any change occurs in any of such factors. Global business environment
Similarly some people may take global and external business environment as similar. However, there is wide difference between the two. External business environment means all factors which are external to a business including its regulator, price trends, industry norms, competitors, supply constraints, political problems, cultural values etc while global business environment means all factors outside the country of operations of a business. There are various factors a business has to face globally if it supplies goods and services to international market. There are international rules and regulations to work in a global market of any commodity or service. Like international oil market which is one of the biggest global markets operates under market forces and the prices of oil are set daily according to its supply and demand. So an oil production company of any Gulf country has to adjust itself in global oil market if it wants to sell its oil there. Similarly a telecom company if operates in several countries so it has to follow not only the rules and regulations of each country where it operates while working there, but it has to be compatible with global business environment to stay ahead globally.
Advantages & Disadvantages of a Domestic Business Environment Doing business abroad often requires different strategies than at home. Within a domestic environment, businesses are affected by a combination of economic, legal and cultural factors specific to that domestic environment, or nation. A business can't necessarily control these factors, but it can work to respond to them appropriately. Despite its complications, domestic business is far simpler than international business. When it has a presence in multiple nations, a business must work to understand and adapt to each national or domestic environment in numerous aspects of business. Market Analysis
Understanding each target market's preferences poses a challenge when operating in international markets. Firms may need to invest substantial resources in analyzing what customers from other countries are most likely to purchase, and how to market to them. This may require a significant investment of time in each country, whereas in the domestic environment, a firm can often predict customer preferences more easily. It likely is more familiar with competitors' offerings and can more easily understand its own market niche. Cyclical Changes
Predicting cyclical changes usually tends to be easier in the domestic business environment. This allows a firm to prepare appropriately to take advantage of economic upturns and stay afloat during...
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