Main Difference between Domestic and international Business are as follows:

S.No

International Business

Domestic Business

1.

It is extension of Domestic Business and

Marketing Principles remain same.

The Domestic Business Follow the marketing

Principles

2.

Difference is customs, cultural factors

No such difference. In a large countries

languages likeIndia, we have many
languages.

3.

Conduct and selling procedure changes

Selling Procedures remain unaltered

4.

Working environment and management

practices change to suit local conditions.

No such changes are necessary

5.

Will have to face restrictions in trade

practices, licenses and government rules.

These have little or no impact on Domestic

trade.

6.

Long Distances and hence more transaction Short Distances, quick business is possible.
time.

7.

Currency, interest rates, taxation, inflation

and economy have impact on trade.

8.

MNCs have perfected principles, procedures No such experience or exposure.

and practices at international level

9.

MNCs take advantage of location economies No such advantage once plant is built it
wherever cheaper resources available.
cannot be easily shifted.

10.

Large companies enjoy benefits of

experience curve

It is possible to get this benefit through

collaborators.

11.

High Volume cost advantage.

Cost Advantage by automation, new methods

etc.

12.

Global Standardization

No such advantage

13.

Global business seeks to create new values

and global brand image.

No such advantage

14.

Can Shift production bases to different

countries whenever there are problems in
taxes or markets

No such advantage and get competition from

some spurious or SSI Unit who get patronage
of Government.

Currency, interest rates, taxation, inflation

and economy have little or no impact on
Domestic Trade.

Differences between International Trade and Domestic Trade

Scope: Scope of international business is quite wide. It includes not only merchandise exports, but also
trade in services, licensing and franchising as well as foreign investments. Domestic business pertains to a
limited territory. Though the firm has many business establishments in different locations all the trading
activities are inside a single boundary.
Benefits: International business benefits both the nations and firms. Domestic business have lesser
benefits when compared to the former.

To the nations: Through international business nations gain by way of earning foreign exchange,
more efficient use of domestic resources, greater prospects of growth and creation of employment
opportunities. Domestic business as it is conducted locally there would be no much involvement of
foreign currency. It can create employment opportunities too and the most important part is business
since carried locally and always dealt with local resources the perfection in utilisation of the same
resources would obviously reap the benefits.

To the firms: The advantages to the firms carrying business globally include prospects for higher
profits, greater utilization of production capacities, way out to intense competition in domestic
market and improved business vision. Profits in domestic trade are always lesser when compared to
the profits of the firms dealing transactions globally.

Market Fluctuations: Firms conducting trade internationally can withstand these situations and huge
losses as their operations are wide spread. Though they face losses in one area they may get profits in
other areas, this provides for stabilizing during seasonal market fluctuations. Firms carrying business
locally have to face this situation which results in low profits and in some cases losses too.
Modes of entry: A firm desirous of entering into international business has several options available to it.
These range from exporting/importing to contract manufacturing abroad, licensing and franchising, joint
ventures and setting up wholly owned subsidiaries abroad. Each entry mode has its own advantages and
disadvantages which the firm needs to take into account while deciding as to which mode of entry it
should prefer. Firms going for domestic trade does have the options but not too many as the former one.
To establish business internationally firms initially have to complete many formalities which obviously is
a tedious task. But to start a business locally the process is always an easy task. It doesn't require to
process any difficult formalities.
Purvey: Providing goods and services as a business within a territory is much easier than doing the same
globally. Restrictions such as custom procedures do not bother domestic entities but whereas globally
operating firms need to follow complicated customs procedures and trade barriers like tariff etc.
Sharing of Technology: International business provides for sharing of the latest technology that is
innovated in various firms across the globe which in consequence will improve the mode and quality of
their production.

Political relations: International business obviously improve the political relations among the nations
which gives rise to Cross-national cooperation and agreements. Nations co-operate more on transactional
issues.

An international business is a business whose activities are carried out across national borders. This
differs from a domestic business because a domestic business is a business whose activities are carried out
within the borders of its geographical location.
A domestic company is one that confines its activities to the local market, be it city, state, or the country it
is in. It deals, generally, with one currency, local customs and cultures, business laws of commerce, taxes
and products and services of a local nature.
The international company, on the other hand deals with businesses and governments in one or more
foreign countries and is subject to treaties, tariffs. currency rates of exchange, politics, cultural
differences, taxes, fees, and penalties of each country it is doing business in. It may also be conducting
business in it's home country, but the emphasis is on trading in the international marketplace.