Drivers in the Business Environment:

1. Competition: Competitive pressure from international companies will force the

company to expand to new markets, even less profitable ones. (Example: McCann

Erickson advertising agency followed, until recently, its client Coca-Cola around the

world).

2. Regional Economic and Political Integration: Involves lowering or eliminating barriers

between neighboring countries and promoting trade within each regional market.

Integration facilitates international trade for companies in member countries, and for

companies from countries outside of the area.

3. Technology: Media development exposes consumers worldwide to foreign

programming. The Internet offers small and medium enterprises in both high- and

low-income countries unlimited international exposure. Technology offers a broad

reach to these businesses whose advertising budget cannot cover the high cost of

international broadcast and print advertising.

4. Improvements in the Transportation and Telecommunication Infrastructure:

Improvements in telecommunications have lowered costs and allowed faster and

more efficient methods of communicating across borders. Outsourcing of customer

service to other countries has become more popular due to improvements in

telecommunications. Efficient and fast travel allows for frequent interaction between

subsidiaries in foreign countries and the headquarters. The introduction of containers

in intermodal transportation and electronic communication between suppliers and

customers greatly facilitates the transportation of physical goods.

5. Economic Growth: Attributed to the emergence of a strong middle class in large

markets. Economic growth created markets of high potential for international brands,

while also opening previously closed markets.

6. Transition to a Market Economy: The opening of previously closed markets in

Central and Eastern Europe and in China, and the subsequent deregulation and

privatization of former government monopolies created important new market

opportunities for international brands.

7. Converging Consumer Needs: Consumers’ exposure to global brands created

demand for global products and worldwide loyalty to international brands. The

emergence of uniform consumer segments facilitates marketing strategies worldwide.

Consumers, in their travels, learn of new product offerings and request them from

home-country retailers, thus generating pull demand.

Obstacles to Internationalization - Companies attempting to establish international presence are likely to encounter obstacles both from within the company and from the outside environment. Among the barriers to internationalization that companies face are the self-reference criterion, government barriers, and international competition.

Domestic Marketing: Marketing that is focused solely on domestic consumers and on the home environment.