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Strategy Development

   

Added on  2019-10-18

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[TYPE THE COMPANY NAME]Strategy DevelopmentAssignment 2Student[Pick the date][Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.]

ContentsIntroduction.................................................................................................................................................1‘AAA’ Model................................................................................................................................................3Industry 1: Car Industry...........................................................................................................................3Industry 2: Airline Industry......................................................................................................................7Conclusion.................................................................................................................................................10References.................................................................................................................................................111

IntroductionThe AAA framework was given by Pankaj Ghemawat. These are the generic approaches that areadopted by the companies for creating a global value. The AAA stands for Adaptation,Aggregation and Arbitrage strategies. In the adaptation strategies, the components of thebusiness model of a company are tailored and modified so that they suit the preferences of thecustomers and the local requirements of the market (Ghemawat, 2013). Thus, the adaptationstrategies help the companies in generating more revenues and the market share of the companyalso gets increased. In the aggregation strategies, the companies are suggested to standardize amajor part of their value proposition and they also group together the processes related toproduction and development. This helps the company in achieving economies of scale andeconomies of scope as, by doing all this, they are able to create the regional and the globalefficiencies (Ghemawat, 2013). In the arbitrage strategy, the companies identify the various partsof their supply chain at various places and thus, they are able to make use of the variouseconomic and other differences between the markets of that country as well as the internationalmarkets (Jha, 2014). In this report, the theory related to adaptation, aggregation and arbitrage will be used to explainthat how the different companies i.e. Toyota and Holden from Car Industry and Virgin AustraliaAirlines and Jetstar Airways from airline industry use this theory for the pursuit of their business.2

‘AAA’ ModelIndustry 1: Car IndustryCompany A: ToyotaCompany B: HoldenAdaptationToyota expanded its business andfocused towards making common car.The main aim of this expansion and forshifting the focus was that the companywanted to make such a car that wouldposition in the local market successfullyand will be able to meet the requirementsand the preferences of the people in themarket of the world. By doing this, thecompany was able to capture the marketof many different regions and therevenues of the company also gotincreased (Chege, 2015). The commoncar produced by the company helps insatisfying the customers in all the regionsthat were targeted by the company andhence it was able to use designadaptation and adapt as per therequirements of the market and itscustomers. In 2011, a consumer affairs reportpointed that the domestic car marketof Australia was very competitive inthe entire world and the companyHolden was losing its presence in thecountry. So, to remain in thecompetition, the company Holdenpicked one formula and they made thecorrect number of cars for payingtheir overheads and sold them in thesimilar way. They picked the rightkind of vehicle that the people ofAustralia would easily accept and itsuits their requirements andpreferences. By doing this, thecompany sold more number of carsand the cover costs of the companyalso got covered (Gollan, 2013). Thecars that were produced by Holdenwere right handed. But the people of3

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