Domestic and international business

difference between domestic and international business.

1. BY- NISHU JINDAL 41710058 DOMESTIC AND INTERNATIONAL BUSINESS. 08-Aug-18 1

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 . 08-Aug-18 2

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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. 08-Aug-18 4

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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 : 08-Aug-18 6

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. 08-Aug-18 7

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. 08-Aug-18 8

9. Thank you… 08-Aug-18 9