ADVANTAGES OF DOMESTIC BUSINESS International business - The exchange of goods and services among individuals and businesses in multiple countries. Scope of international business is quite wide. It includes not only merchandise exports, but also trade in services, licensing. Difference Between International & Domestic Business Strategic Planning by Walter Johnson; Updated September 26, 2017 Strategic planning for business is normally a long-term blueprint to develop and enhance the company's profitability, product development and market share.
International business is the outgrowth of domestic business. Most of the multinational enterprises (MNEs) started their operations in the domestic market. Yet, it is a fact that international business differs from domestic business in many ways (see Table 1.1). Domestic business occurs within the boundaries of a single nation, whereas international business transactions cross national borders.
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Due to the cross over, the firm has to deal with the forces of three types of environments, viz., domestic, foreign, and international. Cultural, political, legal, trade and technological environments overseas are likely to be different. Not only different! But also varying from country to country and region to region within one country.
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Renaultâs âpeopleâs car the Logan, was a hit in Eastern Europe and other parts of the world, but it failed in India, where this larger vehicle that lacked âluxury features met with little demand except as a taxicab. One size fits all is not practical at the product level. These differences call for different business models and different strategies for different markets.
Differences are there not only in substance but also procedural. Differences in terms of geography make international business riskier to domestic business. Risks also arise due to different market characteristics. Negotiations have to be diplomatic in the sense that these do not lead to loss of face.
Table 1.1: Difference between Domestic and International Business from Indian Perspective
FactorDomestic BusinessInternational Business
Difference Between Domestic Business And International Business Pdf DownloadWidely varying among nations and among regions within nations![]() Difference Between Domestic Business And International Business Pdf FreeStable and relatively unimporÂtantOften volatile and of decisive imporÂtanceLaborSkilled labor is usually availÂableOften scarce and requires training/ relearningState InterventionReasonably predictableMay be extensive and subject to rapid changeNegotiation/Communication
(spoken/written/official
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What Is A Domestic Business
language)Mostly Hindi or EnglishMay be required to make use of local languageRisk (variation in inflation, currency, taxation & interest rates)Comparatively less riskyOften more risky due to government controls and both developed and financial marketsContractsOnce signed are bindingMay be voided and renegotiated if one party gets dissatisfiedControlThough a problem, but cenÂtralised control will doA real problem, must maintain a fine balance between centralisation and decentralisationMarket CharacteristicMostly UniformDifferent between nations and within national marketBusiness Values and AttitudesHomogeneousHeterogeneousEnvironmentsOnly domestic environmentDomestic, foreign, and InternationalLevel of development & stage of business cycleSame throughout the domesÂtic marketEach country may be at different level of development and different stage of business cycle
Difference Between Domestic Business And International Business Pdf
Coca Cola received payments in multiple currencies and needed to convert and protect its interests. @In Myanmar official exchange rate for a US $ is equal to 6 Kyats whereas market rate for imports is more than 1000 Kyats. $Each party has to adjust its behavior to meet the expectations of the other.
Difference Between Domestic Business And International Business Pdf Online
A number of considerations that collectively differentiate international business have been termed by Keith Head as six forms of separation. These are Political Separation (sovereignty, regional integration and increasing number of nations from 74 in 1950 to 220 today), Physical Separation (physical barriers and distances), Relational Separation (absence of past interactions and causing reluctance to engage in future transactions), Environmental Separation (temperature, rainfall, altitude, latitude, water availability, soil types, and mineral resources), Developmental Separation (levels of economic development), and Cultural Separation.
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