Domestic strategy means internationalizing by exporting goods abroad as a means of seeking new markets. At this stage, the firm is focusing on domestic markets and exporting their products without altering the products for foreign markets. An export manager may be assigned to control foreign sales. Management at this stage usually adopts an ethnocentric attitude, as well as a short-term perspective.
A domestic strategy is a strategy used to make money through business and development programs. It also encourages international labor standards.
A domestic strategy allows managers in every country to adapt their services and products to match government regulations, local market preferences, competitive situations, and technological capabilities.
In case of this strategy, the business unit of each country will include as much of the value chain as possible or feasible- for instance, marketing, research and development, production, sales, inbound logistics, service, and distribution- and all of its functions will be customized to the requirements of that country. In contrast, a company following a global strategy functions in its different markets from centralized facilities, it limits the value chain’s replication in different countries. The economic forces generate pressure for using a global strategy, while the social forces influence companies to function under the domestic strategy.