Difference between Domestic and International Business

Difference between Domestic and International business

Domestic Business

International Business

Geographic AreaIt is carried out within the national or geographic borders of the countryIt is carried out across borders and national territories of a countryRestrictionsTariffs and quotas are not present and very few local restrictions are imposed on a domestic businessMany restrictions are imposed while doing business internationally or entering a foreign market e.g. Tariff and non-tariff barriers, exchange controls, local taxes etc.CultureThere is less difference in the market culture of local areas and regions within a country. The market culture is relatively uniformThe market culture widely varies among different nations and regionsRiskRisk factor is lessRisk factor is highCurrencyA domestic business deals in a single currencyAn international business deals in multiple currenciesHuman ResourceA domestic business can succeed with human resource with minimum skill and knowledgeMultilingual, multi-strategic and multicultural human resource is necessary for smooth operations of an international businessEmployees are usually from the same countryGlobal human resource practices are carried out in an international businessPromotionDomestic marketing and advertising strategies are usedMarketing and advertising strategies vary from country to country due to language barriersPricingSame price is charged for similar productsPrice differentiation is carried outInvestmentLess capital investment is involvedHuge capital investment is involvedQualityQuality standards are lowQuality standards are very high. Global standards are setRegulationsOnly local regulations are applicableInternational and host country regulations are applicableResearchIt is easy to conduct business research, demand analysis and customer surveyIt is very difficult and costly. Reliability of information depends upon the individual countryCost AdvantageDo not enjoy Cost advantageAdvantage of location economies and cheap resources are availableEnvironmentA domestic business is only affected by the variables in the domestic environmentDomestic, foreign and international environment factors affect an international businessDevelopmentThe level of development may be same throughout the domestic marketEach country may be at a different level of development

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