Competition between Transnational Corporations and Domestic Corporations on the Basis of the Comparative Advantage and their Strategy Selection

Market opening attracts lots of transnational corporations to invest directly and induces the market competition between transnational corporations and domestic corporations as well.The paper establishes a strategy selection model on basis of the comparative advantage to analyze what kind of strategies the corporations will take to compete in the market.The paper comes to the conclusion that transnational corporations will choose technology advance strategy relying on their technology and focus on high extreme market;domestic country's corporations will choose cost advance strategy relying on their scale and focus on low extreme market.At last,the paper uses the data from Chinese color TV market to test the theory.