Global strategic rivalry theory developed
by Paul Krugman & Kelvin Lancaster in 1980. According to this theory, a
firm have to develop a competitive strategy to sustain in the global
competition. A firm can gain competitive advantage through:
(1)Owning intellectual property: It is done by brand name, trademark,
patent/copy right, unique formula etc.
Ex-Unique formula of Coca-cola
(2)Investing in R&D: It is the process of gaining competitive advantage by R&D
techniques. Ex-Boeing is the most successful airplane industry cause it
does huge amount of research for its competitors by its R&D department
(3)Achieving
economic of scale or scope: At the time of international trade, the production increased. For
this reason cost per unit reduces and new sector/scope is being created for
investment therefore, various sized and typed product can be produced.
(4)Exploiting the experience curve: Sometime competitive advantage can be
gain by injecting the experience. Very often firms recruit experienced
people for their need.
