In the USA, inflation does not have a great impact on economic performance on individual companies but can influence economy of the region and the state. If there is inflation, money performs less efficiently as a standard of deferred payment. Some contracts, however, have cost-escalation clauses allowing the passing on of any increased costs (Frame, 2002).
Demand condition is another important factor to consider. The nature of demand conditions for Canbide is important because it determines the rate and nature of improvement and innovation by the firms in the nation. Three characteristics of demand are particularly important: the composition of demand, the size and pattern of growth of home demand, rapid home market growth, and the means by which a nation's home demand pulls the nation's products and services into foreign markets. Canbide is large company operating on the national scale, and for this reason it is crucial to take into account growth patterns and demand. Canbide should take into account industrial growth patterns which provide an insight into market demand. Because they generally show consumption patterns, production patterns are helpful in assessing market opportunities. Additionally, trends in manufacturing production indicate potential markets for companies that supply manufacturing inputs.