Major Difference between Domestic and International Business

Domestic Business and International Business

Conducting and managing international business operations is more complex than undertaking domestic business. Differences in the nationality of parties involved, relatively less mobility of factors of production, customer heterogeneity across markets, variations in business practices and political systems, varied business regulations and policies, use of different currencies are the key aspects that differentiate international businesses from domestic business. These, moreover, are the factors that make international business much more complex and a difficult activity.

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 utilization 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.

© 2009 Dilip Chandra

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Comments Please 66 comments

aishwarya 7 years ago

we need more differences.... pls..

shailesh gururani 7 years ago

this is really helpful but i want in detail from beginning what is international business,scope, difference and almost all topics about this

Devaki 7 years ago

Nice to see your effort. Could you please develop more differences here?

sreya 7 years ago

very helpful information,need some more differences..

murtala k ceesay 7 years ago

this is really helpful in the studies of so many people around the world, thank you soo very much

dilipchandra12 profile image

dilipchandra12 7 years ago from India Author

aishwarya, Devaki, sreya - i have already added more differences.

shailesh gururani - international business hub was opened, follow the link given at the end.

murtala k ceesay and all others, thank you for your comments

Nenu profile image

Nenu 6 years ago

Thanks For Giving Such A wonderful Peace Of Information.

I Would Like To Put it on my blog.

Keep It Up.

Amrut 6 years ago

Thank You For Giving A Nice Information.

AHTSHAM 6 years ago

we need more comments not only comments . we want actual shape of differences with the middle line at one side show domestic and other side show international differences

AHMER 6 years ago


dilipchandra12 profile image

dilipchandra12 6 years ago from India Author

Nenu, Amrut, AHTSHAM and AHMER thanks for ur comments. AHTSHAM and AHMER i got ur requests, well i'll do my best... perhaps i'll open a new hub for this or else i'll publish them in my blog... i'll write that here when am done.

thank u again for ur comments.

Abiodun. O. Blessing 6 years ago

Kudos to you with this comprehensive effort you have made to put something relevating for the entire nation to see and utilized, please can you put more effort....,

zn 6 years ago

helpful,but limited.

fareed tamim 6 years ago

it help me a little bit,but you need to make more clarification, so that one can understand easily

DEEKSHA 6 years ago

Its Really Good, But its Better to give More Information..

dilipchandra12 profile image

dilipchandra12 6 years ago from India Author

Deeksha... Also see International Trade for more information. Thanks for the comments.

Avinash yagati 6 years ago

very important informations thanks every body must know the basic differences between domasti and international markets.

tipu 6 years ago

enough for my assignment...thnx...:)

ammar 6 years ago


it helped me alot in my assignment :)

keep rocking :)

Bhavik 6 years ago

nice, helped me a lot in my social studies assignment..............

kanwal 5 years ago

this is really helpful but i want more information

musie_melese 5 years ago

much thanks for the articles u included , but somewhat need to add additional significant difference b/n them...

nyasha 5 years ago

thank you for the wonderful actually helped me than i thot.keep on helping.thank you once again

Faith 5 years ago

Usefull and helpfull info. Nice work.

NJOUFAC EMELDA 5 years ago


Excellency 5 years ago

Encouraging.u can do better dan dis...

fajfA D aaslaa 5 years ago

hi like to see this site

nancy leone 5 years ago

thax so much GOD BLESS

md fahim bin nizam 5 years ago

kub nice akta assignment leklam.........thnx of google...

SIVA 5 years ago


rakshika 5 years ago


nitsimran singh 5 years ago

itzz nice.. thanks 4 info.

Jobayer 5 years ago

Thanks a lot.

sushma sharma 5 years ago

thank uuuuuu

Dungar 5 years ago

i want more difference.

s.vijayvarman cms 5 years ago

this page useful for my seminor topic thank uuuuuuuuu

roshini 5 years ago

Thanks a lotttttt........ it is very usefull 4r my assignment.......

dilipchandra12 profile image

dilipchandra12 5 years ago from India Author

Sharath Lee, received your e-mail and i've gone through the same as well. Before you write your assignment, difference between international and domestic business, instead of directly jumping into differences between the said two, try to put some information on International business and Domestic business. Go through my articles on them. Follow the links:

Please feel free to contact me if you have any questions or comments.

Onyemalu Janevine Adaora 5 years ago

Nice work. It really helped me in my International Economics Assignment. But pls I need more differences

gaurav 5 years ago

thanks for giving some nice information.

kavitha 5 years ago

Nice work. Felt very happy by reading this. keep it up. Thank you so much..

mktmamun 5 years ago

you infromation is really good.which will help me lot to make my assignment great

vaishnavi 5 years ago

i found this topic quite interesting after reading this article thanxxx

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jacobspage 4 years ago from Texas

Great info, Great HUB.

navneet rai 4 years ago

it is quite and simple to understand

pradnya zope 4 years ago

thanks for giving an usefull information.can u please give me in detail the difference between international and domestic companies.

Owen 4 years ago

Tabulated differences would do it better for me.

skaiser 4 years ago

thanks for providing such knowledge..

Taiwo samson 4 years ago

to much, i realy apriciate this write up it help me in my assignment in school. but i will be very grate if i can see the similarity of international trade and domesric trade.

Ajayi Ronke 4 years ago

This is indeed a great job,but i shal be grateful if u can write something on d similarities btw d two.GOD bless

Ajayi Gabriel.unergraduate fedpolyede 4 years ago

What a commedable write-up indeed. Despite its age,it still relevant with the current studies. Nevertheless,it will be more appreciative and helpful if research can be caried out on the similarities between the two forms of business.thanks for the good work.

Grace .E.Robert 4 years ago

Thanks a lot. My assignment was made easy.

Chands 4 years ago

Well done, mate! This is pretty informative. However, I do believe that there are more differences than you have mentioned.

trupti 4 years ago

need some more information

Md. Emtiaz Ahmed Sohan 4 years ago

Thanks for the differences but need more difference points, overall good...


helpfull for my study and increment of knowledge . thanks for sharing

PRIYA BANSAL 4 years ago


jody 4 years ago

1-international investment is more costly than local investment because of the unexpected taxes such as withholding taxes on dividends .

2-Reliance on foreign legal remedies: if you have a problem with your investment,you may not be able to sue the company in your home country. Then you have to rely on whatever legal remedies are available in the company`s home country.

rass 3 years ago

need more information

Joshua Magwesela 3 years ago

Very helpful and am so thankful

meanguy 2 years ago

can you suggest some ways in which an enterprise can deal with greater likelihood of major change in international compared to domestic marketing.

anu 2 years ago

thanks for giving some valuable information

ceejay 2 years ago

can you include information on the differences over domestic and foreign banking

Garo 2 years ago

please what is the sponsor of this website

dilipchandra12 profile image

dilipchandra12 2 years ago from India Author

Garo - the above information was the analysis of the author, that is me. It was gathered after reading many books of different subjects.

mallinath 17 months ago

Thanx for good information

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