Introduction
Domestic businesses that have ventured into the global market are profitable and more sustainable. This article will discuss the differences between international and domestic businesses, and why local businesses should venture in the global market. Additionally, the article will provide a specific example of domestic and international industry and their businesses. Furthermore, ethical considerations in the global market will be explored. Therefore, the reader will gain knowledge on how a domestic business can venture into the global market for increased profits.
Domestic Businesses in Global Market
Domestic and international business activities differ in terms of scope and operations. Domestic business involves fiscal transactions that are restricted inside a geographical location of a specific country (Gereffi et al., 2021). International business is any kind of business that operates on a transnational scale (Gereffi et al., 2021). Goods and services supply within a single country and local politics and cultural influences are key features of domestic businesses. The international business is characterized by cross-border transactions, foreign currency use, and global and domestic competition. Britain businesses in the U.S. use dollars and pound sterling. Moreover, such businesses face competition in Britain and U.S.
Many businesses have taken advantage of the global market for their expansion. McDonald’s is one of the businesses that started at the domestic level and expanded to the global market. The company started as a drive-thru restaurant in San Francisco, California, but has now expanded to more than 120 countries with about 38,000 restaurants (Sun, 2022). KFC is another company that took advantage of the global market for its expansion. Therefore, KFC and MacDonald’s continue to enjoy the benefits of the large global market.
Global Market Benefits
Domestic businesses should expand to a global market for various reasons. The global market presents a vast consumer base. Consequently, businesses enjoy more profits and get new ideas for product development. For instance, in 2019 alone MacDonald’s made a gross profit of $11.17 billion (Sun, 2022). Secondly, cross-border transactions make a business less risky since it is not pegged on a single country’s economy. KFC is one of the companies that remained profitable during the COVID-19 pandemic.
Ethical Considerations
Although the global market is profitable for domestic businesses that go international, ethical considerations are crucial. The businesses are required to operate within the precincts of human rights. For instance, exploiting foreign human resources through cheap but hard labor is unethical. Additionally, given the diversity of the global market, businesses should discourage any form of discrimination, such as racism, among their stakeholders. Ethical considerations contribute to an organization’s brand reputation.
Conclusion
The global market is beneficial to domestic businesses due to the available wide consumer base, increased profits, and sustainability through hard economic conditions. KFC and MacDonald’s are some of the domestic businesses that went international. Ethical considerations such as non-discriminative policies are crucial for international brand image. Therefore, the global market is more beneficial than the domestic one due to an expanded consumer base and increased profitability.
References
Gereffi, G., Lim, H.-C., & Lee, J. (2021). Trade policies, firm strategies, and adaptive reconfigurations of global value chains. Journal of International Business Policy. Web.
Sun, Y. (2022). Marketing competition analysis of the feasibility of investment in McDonald’s. Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development. Web.
