Enterprise Competition And Market Entry And Exit

Market Opening attracts lots of transnational corporations to invest directly and induces the market competition between translational corporations (TNCs) and host country's corporations (HCCs) as well. It turns to be a urgent topic to research the competition and the influence on the market.On the other hand, with the intensive of the market competition, it has been an important way for corporations to increase market shares by developing specialied products to meet the needs of targeted market. Therefore, multiproduct competition and the selection of product line draw more companies' attentions and become their major competition stratigies.The paper makes efforts to analysis the market competition between TNCs and HCCs and the influence on the market by means of multiproducts competition. The research wants to find out the characters of the competition and the trends of the market equilibrium.The basis of the competition between TNCs and HCCs is their comparative advantages which facilitate them to occupy a favorite position in market competition when two types of corporations take strategy which utilizes their own comparative advantages. Therefore, the competition between TNCs and HCCs also appears as the competition of their strategies. Following this idea, the paper sets up a product line chosen model on basis of comparative advantages to analyze what kind of strategies the corporations will take to compete in the market. After theoretical analysis, we come to the conclusion that transnational corporations will choose technology advance strategy relying on their technology and focus on high extreme market; host country's corporations will choose cost advance strategy relying on their scale and focus on low extreme market.The behavior of corporations results a certain market structure with some characters. Therefore, the transformation of market structure is a regular process under the rational strategic competitions between TNCs and HCCs. Researching on the strategic competitions between two sides, the paper considers the market structure is a process of transformation between equilibrium and change and the market structure can be divided into two stages: Market equilibrium stage and market change stage.The market equilibrium stage is that TNCs domain the high extreme market and HCCs domain the low extreme market when both sides choose strategies on basis of comparative advantages.The market environment comes into being because the escalation of contradiction between the demand decrease in the mature stage of product's life circle and the supple expansion due to the cost advantage strategy and leads to HCC's penetration into the high extreme market and the market structure moves into market change stage. In the market change stage, TNCs withdraw the manufacture of lower technology products and expand the manufacture of higher technology products. After border of high extreme market is redefined and the entrance barrier is reset, the market structure returns to equilibrium stage.In the long term, the gap of comparative advantages between TNCs and HCCs will decrease in the process of HCC's penetrating into high extreme market and TNCs creating a new high extreme market. At last, the two pattern market structure will disappear. The market goes to the full opening and market efficiency will be maximized. The HCCs take the international competitive power.After the establishment of theory, the paper uses the data from china color TV market to test the theory.Through the theoretical analysis and the quantitative test, the paper gives some policy suggestion as follows: The government should keep implementing market opening policy and loosing the regulation in order to let the market rule the competition between TNCs and HCCs. At the same time, the government can cushion the impact from the market opening by controlling the proceeding of opening, encouraging and supporting the technology innovation.The paper can be divided into 8 chapters. The first chapter is an introduction. The second chapter combs the letliture of multiproducts and give some comments on the latist research. The third chapter demonstrates the cause and the influence of multiproducts. The fourth chapter analyzes how the companies enter and quit the targeted market through product line selection. The fifth chaper introduces the competition between TNCs and HCCs and points out their different adventages. The six chapter sets up a product line chosen model on basis of comparative advantages to analyze how the companies compete in the market by choosing their product line. The seventh chapter interprets the market structure and dynamic changing process and explains the cause to the market transformation. The eighth chapter comes to the conclusion and gives some policy suggestion.