Domestic business refers to commercial transactions that occur within the geographical boundaries of a single country. It benefits from low transaction costs, short production to sale periods, and encouragement of small businesses. International business involves manufacturing and trade across national borders in a global context. It includes cross-border sales, investments, and logistics between two or more countries. Conducting international business presents greater challenges than domestic operations due to differences in customs, cultures, currencies, regulations, and economic environments between nations. Careful planning of business strategies is required to successfully expand operations globally.
2. Definition of Domestic Business
The business transaction that occurs within the geographical
limits of the country is known as domestic business.
Alternately known as internal business or sometimes as home
trade.
There are many privileges which a domestic business enjoys like
low transaction cost, less period between production and sale of
goods, low transportation cost, encourages small-scale
enterprises, etc.
In a domestic trade, the buyer and seller belong to the same
country .
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4. Definition of International Business
International Business is one whose manufacturing and trade
occur beyond the borders of the home country.
All the economic activities indulged in cross-border transactions
comes under international business.
It includes all the commercial activities like sales, investment,
logistics, etc., in which two or more countries are involved.
The company conducting international business is known as a
multinational or transnational company.
There are several drawbacks which act as a barrier to entry in the
international market like tariffs and quota, political, socio-
cultural, economic and other factors that affect the international
business.
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6. International Business Domestic Business
It is extension of Domestic Business
and Marketing Principles may alter.
Difference is customs, cultural
factors.
It is quite wide.
Selling procedure changes.
Working environment and
management practices change to suit
local conditions.
Will have to face restrictions in trade
practices, licenses and government
rules.
The Domestic Business Follow
the marketing Principles.
No such difference. In a large
countries languages like India.
It pertains to limited territory.
Selling Procedures remain
unaltered.
No such changes are necessary
These have little or no impact on
Domestic trade.
Main Difference Between Domestic and
international Business are as follows :
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7. Long Distances and hence more
transaction time.
Currency, interest rates, taxation,
inflation and economy have impact
on trade.
MNC’s have perfected principles,
procedures and practices at
international level
MNCs take advantage of location
economies wherever cheaper
resources available.
Large companies enjoy benefits of
experience curve
High Volume cost advantage.
Global Standardization
Global business seeks to create
new values and global brand
image.
Short Distances, quick business
is possible.
Currency, interest rates, taxation,
inflation and economy have little
or no impact on Domestic Trade.
No such experience or exposure.
No such advantage once plant is
built it cannot be easily shifted.
It is possible to get this benefit
through collaborators.
Cost Advantage by automation,
new methods etc.
No such advantage.
No such advantage.
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8. Conclusion-
Carrying out the activities of international business and its
management is far more difficult than conducting a domestic
business. Due to changes in political, economic, socio-cultural
environment across the nations, most business entities find it
difficult to expand their business globally. To become a
successful player in the international market firms need to plan
their business strategies as per the requirement of the foreign
market.
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