Difference between Domestic and International business

S.No. Basis Domestic Business International Business

1 Geographic It is carried out within the It is carried out across borders
Area national or geographic borders and national territories of a
of the country country
2 Restrictions Tariffs and quotas are not Many restrictions are imposed
present and very few local while doing business
restrictions are imposed on a internationally or
domestic business entering a foreign market e.g.
Tariff and non-tariff barriers,
exchange controls, local taxes
etc.
3 Culture There is less difference in the The market culture widely
market culture of local areas and varies among different nations
regions within a country. The and regions
market culture is relatively
uniform
4 Risk Risk factor is less Risk factor is high
5 Currency A domestic business deals in aAn international business deals
single currency in multiple currencies
6 Human A domestic business can Multilingual, multi-strategic and
Resource succeed with human resource multicultural human resource is
with minimum skill and necessary for smooth operations
knowledge Employees are of an international business.
usually from the same country Global human resource
practices are carried out in an
international business
7 Promotion Domestic marketing and Marketing and advertising
advertising strategies are used strategies vary from country to
country due to language barriers
8 Pricing Same price is charged for Price differentiation is carried
similar products out
9 Investment Less capital investment is Huge capital investment is
involved involved
10 Regulations Only local regulations are International and host country
applicable regulations are applicable
11 Research It is easy to conduct business It is very difficult and costly.
research, demand analysis and Reliability of information
customer survey depends upon the individual
country
12 Cost Do not enjoy Cost advantage Advantage of location
Advantage economies and cheap resources
are available
13 Environment A domestic business is only Domestic and international
affected by the variables in the environment factors affect an
domestic environment international business
14 Development The level of development may Each country may be at a
be same throughout the domestic different level of development
market.
Q. Why do firms expand Internationally .
1. Market Motives:
a. Offensive : To seize market opportunities in foreign countries through trade or investment.
b. Defensive : To protect and hold a firms market power of competitive position in face of
threats from domestic rivalry or changes in the government policies.
2. Economic Motives
a. To increae return through high revenue and low cost.
b. Foreign Listing
c. Increase their cash flows
3. Strategic Motives
a. Intenttion to capitalise on their distinctive resources or cpaabitilies
b. First mover target , Technological benefits, Brand Image, vertical integration