Major Difference between Domestic and International Business
Domestic business
- Nationality of buyers and sellers: People or organizations from one nation participate in domestic business transactions.
- Nationality of other stakeholders: Various other stakeholders such as suppliers, employees, middlemen, shareholders and partners are usually citizens of the same country.
- Mobility of factors of production: The degree of mobility of factors of production like labour and capital is relatively more within a country.
- Customer heterogeneity across markets: Domestic markets are relatively more homogeneous in nature.
- Differences in business systems and practices: Business systems and practices are relatively more homogeneous within a country.
- Political system and risks: Domestic business is subject to political system and risks of one single country.
- Business regulations and policies: Domestic business is subject to rules, laws and policies, taxation system, etc., of a single country.
- Currency used in business transactions: Currency of domestic country is used.
International business
- Nationality of buyers and sellers: People or organizations of different countries participate in international business transactions.
- Nationality of other stakeholders: Various other stakeholders such as suppliers, employees, middlemen, shareholders and partners are from different nations.
- Mobility of factors of production: The degree of mobility of factors of production like labour and capital across nations is relatively less.
- Customer heterogeneity across markets: International markets lack homogeneity due to differences in language, preferences, customs, etc., across markets.
- Differences in business systems and practices: Business systems and practices vary considerably across countries.
- Political system and risks: Different countries have different forms of political systems and different degrees of risks which often become a barrier to international business.
- Business regulations and policies: International business transactions are subject to rules, laws and policies, tariffs and quotas, etc. of multiple countries.
- Currency used in business transactions: International business transactions involve use of currencies of more than one country.
