Global Strategy for Starbucks: Aligning with Ghemawat’s AAA Framework

Running head: GLOBAL STRATEGY
GLOBAL STRATEGY
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1
GLOBAL STRATEGY
In current times, there are various factors which have led the market to become
volatile in nature. These factors such as the economic conditions of the countries and the
nature of the market, companies are facing challenges to develop global strategies. The
formation of the right global strategy could be a huge investment for the company since it
would help the company to compete globally. The global strategy would help the company to
increase their customer base, which in turn will increase their revenue as increasing the
customers would increase the sales. This essay will discuss about the global strategy of
Starbucks and align it with the Ghemawat’s AAA global strategic framework.
Starbucks Corporation have a set strategy which helps them in their international
expansion especially in the country of China. Their strategy is built on the fact that China has
extreme potential to grow and expand their corporation and provide new opportunities to
them. Starbucks have tried to adhere to the local environment of China since they have been
placed in China (Lemus et al. 2015). Starbucks has planned to start an initiative of building a
4th place experience which aligns the store with the ecommerce and digital technology of the
country. They opened an e-store in Tmall which has attracted a lot of customers due to its
feature of social gifting. These global initiative have been taken to increase the market share
in China.
The Ghemawat’s AAA Framework consists of three A’s which are Adaptation,
Aggregation and Arbitrage (Appendix 1). This framework is adapted by several organisations
for their international integration. Motohashi (2015) states that adaptation strategy is used to
increase the revenue and the market share of the company by integrating certain components
in their business model. This is the most used and common strategy among the three
strategies of the framework. This strategy can be used by companies for penetrating any new
market or increasing their share in an already established market. With the help of this
strategy, the company would be able to make changes which would be accepted by the local