Question

Discuss the key differences in operating a business in a global versus the domestic environment from economic, political, cultural, and technological perspectives.

Answer 1

Doing a business operations and decision making in domestic business environment will be difficult and different while entering or operating in a global business environment. For example, Amazon will have to face many challenges in African markets, chinese markets etc. while launching any consumer brand with its exclusive business model rather than in USA. According to PESTEL framework an organization working in domestic market will be more likely to habitual with political, social, economic, technological, legal and environmental factors affecting the external business environment. These forces will be more complex while business operations in a foreign market. For example , Apple will have to understand the technological and environmental issues in India so as to launch appropriate business practices and products offerings.

We can say that an organization will know how to assess the domestic market competitors, legal regulators, and political understandings but these factors will have to be understand and designed as per the context of an unknown foreign market or global market. Many times , it will be easier to get licensed in USA for any specific business operations but same provisions may take enough time which will be create time overruns in case of project organization.

For example, The failure of Enron in India can be seen as an example of such factors of political, economic, technology and legal framework.