Difference between Domestic and International business
Domestic Business |
International Business |
|
Geographic Area |
|
| It is carried out within the national or geographic borders of the country | It is carried out across borders and national territories of a country |
| Restrictions | |
| Tariffs and quotas are not present and very few local restrictions are imposed on a domestic business | Many restrictions are imposed while doing business internationally or entering a foreign market e.g. Tariff and non-tariff barriers, exchange controls, local taxes etc. |
| Culture | |
| There is less difference in the market culture of local areas and regions within a country. The market culture is relatively uniform | The market culture widely varies among different nations and regions |
| Risk | |
| Risk factor is less | Risk factor is high |
| Currency | |
| A domestic business deals in a single currency | An international business deals in multiple currencies |
| Human Resource | |
| A domestic business can succeed with human resource with minimum skill and knowledge | Multilingual, multi-strategic and multicultural human resource is necessary for smooth operations of an international business |
| Employees are usually from the same country | Global human resource practices are carried out in an international business |
| Promotion | |
| Domestic marketing and advertising strategies are used | Marketing and advertising strategies vary from country to country due to language barriers |
| Pricing | |
| Same price is charged for similar products | Price differentiation is carried out |
| Investment | |
| Less capital investment is involved | Huge capital investment is involved |
| Quality | |
| Quality standards are low | Quality standards are very high. Global standards are set |
| Regulations | |
| Only local regulations are applicable | International and host country regulations are applicable |
| Research | |
| It is easy to conduct business research, demand analysis and customer survey | It is very difficult and costly. Reliability of information depends upon the individual country |
| Cost Advantage | |
| Do not enjoy Cost advantage | Advantage of location economies and cheap resources are available |
| Environment | |
| A domestic business is only affected by the variables in the domestic environment | Domestic, foreign and international environment factors affect an international business |
| Development | |
| The level of development may be same throughout the domestic market | Each country may be at a different level of development |
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Thank you very much for this. Very helpful.
Hi
Hi neeraj
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