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International and Domestic Business - Coggle Diagram
International and Domestic Business
Quality of Products
Domestic business is limited to the quality standards of a single country, meaning the standards are going to be lower compared to an international business.
The quality stanards for an international business are based on the global market, rendering their quality standards higher then domestic business.
India has a larger population and a much lower average wage that the United States. Therefore, they are able to create certain products at a significantly lower cost, while maintaining a similiar quality to American made products.
Research
Research for domestic businesses is easier and cheaper to conduct as their target audiences and cultures are less diverse and easier to connect with.
Internationl business is more expensive and diffuclt to conduct because the target audiences and cultures are much more diverse. Research needs to be conducts in several different countries
The poverty level in India is much higher than the United States and internet access is not as easily accessible, therefore conducting research within the United States, both domestic and international, is much easier and effective.
Cultures
Cultural diversity generally has less of an impact on domestic business as they only need to target cultures within their own country.
While America is often refered to as a "melting pot", India has a much larger population that is much more diverse compared to the United States. There are over 1500 languages spoken throughout India, compared to over 400 in the United States. There are more cultures and religions in India than the US and they are in much closer vicinity to each other. There is a stark difference between domestic business practices in India compared to the United States.
International business has to take into account cultures across the entire global when making business decisions.
Legal System
Domestic business only needs to focus on the laws within their own country, making legal navigation much easier and straight forward for them.
India and the United States are similar in that there are national laws, as well as numerous state laws that need to be considered when doing domestic business. However, since India is a developing country, corrupton is much more prevelant within the country. Businesses need to consider whether doing international business with developed countries is a better option because corruption may be less likely.
International businesses need consider both international laws and domestic laws within the countries they are doing business. This makes legal navigation much more difficult and complicated which can be costly and have steeper legal reprecussions.
Advertising
Domestic businesses will likely spend less on advertising as they can focus on a smaller population. They can decide whether advertising should only be limited to their city, state, or country.
Advertising for international businesses is going to be more expensive and complicated as it will need to be more widespread. Businesses will need to decide what countries they want to focus their adverstising within and do a cost benefit analysis.
Since India's population is much larger and more dense than the United States, advertising is going to be easier and more effective. However, internet is more easily accessible in the United States and social media is a very effective method of advertising, giving the US an advantage in that sense.
Taxation and tariffs
Domestic business is limited to their own country, therefore, they only need to pay taxes to their own country. Tariffs don't have much of an effect on them because they are selling their products to other countries.
International businesses have to pay taxes within their own country, as well as the countries they are doing commerce in. Tariffs and trade wars between countries can become very costly and make the process of international trade extremely complicated.