Major Difference between Domestic and International Business - QS Study
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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.