This article will help you to learn about the similarities and differences between international business and domestic business.
Difference between International Business and Domestic Business (With Similarities)
Similarities between International Business and Domestic Business
1. Satisfying the basic needs of the consumers is the prime importance:
It involves to find out what the customer’s wants and how to meet their needs.
2. Creation of Goodwill:
It is necessary in both the markets for this:
(a) Liberal guarantees, and
(b) Sale services to the customers on fairly extensive scale.
3. Research and development:
It is necessary in both by research new facts are found and in the light of these facts products are improved.
4. The technique of marketing: i.e., non-human factors such as:
(iii) Costs are similar to both the markets
Differences between International Business and Domestic Business
Main difference between international business and Domestic business is of “Environment” in which the two take place.
1. Sovereign Political Entities:
Each country has right to put certain restrictions to safeguard their countries own interest,
(i) Imposition of tariffs and customs duties:
In this GATT (General Agreement on Tariffs and Trade) has reduced the tariff globally on regional basis. Quantitative restrictions are imposed with an intention to restrict trade in some specific commodities,
(ii) Exchange control:
Under this restrictions the importer is not allowed foreign exchange as required to make payment on imported goods,
(iii) Imposition of more local taxes:
With the object of making the imported goods more costly local taxes be imposed.
2. Different Legal Systems:
This makes the task more difficult as they are not sure as to which particular system will apply in their case.
3. Different Monetary Systems:
At present different rates are applicable to different transactions.
4. Lower Mobility of Factors of Production:
In-spite of the development of air transport and opening of banking the mobility of labour and capital is not as much as it is within the country itself.
5. Differences in Market Characteristics:
Demand pattern, channels of distribution, methods of promotion etc. differs market to market.
6. Differences in Procedures and Documentation:
The laws of the country and the customs of trade in each country differs, procedures differs. Businessmen have to comply the procedures and traditions.