Factors

There are advantages and disadvantages to everything in life. Staying domestic or going
global is no different. You have to look at the industry your business is in and review what
impacts it. Factors that impact the domestic environment include market analysis, cyclical
changes, market size, communication, access to materials and labor, and reporting. Let's
look at each of these in more detail.

Market analysis is the understanding of your customer's wants and needs. This is a simpler
task in the domestic environment and gives you an opportunity to predict the trends.
Completing this task in a global environment involves massive research in each country. For
example, McDonald's has different menu options for each market, which, no doubt, took
large amounts of research into customer preferences to design.

Cyclical changes refer to the ups and downs in the economy. The domestic business
environment has an easier time predicting these changes, but the impact is stronger in the
domestic business environment than the international. For example, if you sell hamburgers
and the local price of beef has recently increased, what will that do to your profit? Buying
local will increase your cost and decrease your profit. Having the opportunity to purchase
from international sellers who have lower priced beef, could decrease your cost and
increase your profit.