Difference Between International & Domestic Business Strategic Planning

by Walter Johnson; Updated September 26, 2017
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Strategic planning for business is normally a long-term blueprint to develop and enhance the company's profitability, product development and market share. These are the goals of all firms in a capitalist economy. However, domestic investment and marketing is very different than going global.

Types

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The main types of distinction between planning in domestic and foreign investment and trade can be summarized around the idea of adaption. In general, labor in the developing world is less productive than in the developed world, and infrastructure is often less developed. These important variables must be included in any long-range plan. It is often the case that strategic plans for global businesses concern the desire to hire a cadre of local professionals to assist the firm in integrating into the local economy. Without this integration, global investment might backfire.

Features

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The main features marking the difference between strategic plans in the international and domestic economy concern the diversity of potential markets and investments. The main issues revolve around adapting to the differing currencies, regulations and political problems of different states. These are not issues in local investment in the developed world.

Considerations

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If the firm is American, marketing strategies can be very simple. There is generally one media and one overarching consumer culture. On the other hand, global marketing is radically different, since it is often the case that products might be modified to avoid offending local sentiment, and local regulations might be very different than in the U.S. An American oil firm seeking to invest in Libya must adapt to a form of government that is not transparent and generally authoritarian. This means any strategic plan from this hypothetical economy must learn the ins and outs of Libyan politics and the military bureaucracy of the country before and local investment is contemplated. Therefore, long-term planning in international business becomes intensely political.

Benefits

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This kind of adaptation necessary to “go global” might have benefits for the company. One major difference between domestic and international strategies concerns the term of investment. Overseas investment and trading demand long-term goals. The adaptation process itself often takes a long time, and therefore, shareholders might begin taking a longer term view if a firm goes global. This force toward the long term might not exist at the domestic level.

Effects

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Ultimately, strategic planning on the domestic and the international front will develop two very different approaches to firm goals. While the basic goals remain the same (profit, product development, etc), means to reach these goals differ radically. The specialist in international strategic planning is dealing with far more complex variables in terms of logistics, culture, political systems and human resources. Only companies that are well-established should approach strategies that include overseas development, since a well-functioning, firm bureaucracy containing specialists in the target market are indispensable for developing strategies that work outside the U.S.

About the Author

Walter Johnson has more than 20 years experience as a professional writer. After serving in the United Stated Marine Corps for several years, he received his doctorate in history from the University of Nebraska. Focused on economic topics, Johnson reads Russian and has published in journals such as “The Salisbury Review,” "The Constantian" and “The Social Justice Review."

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