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[TYPE THE COMPANY NAME]AAA Theory[Type the document subtitle]Student[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.................................................................................................................................................2AAA Model..................................................................................................................................................3Industry 1: Food and Beverage................................................................................................................3Industry 2: Computer Software...............................................................................................................5Conclusion...................................................................................................................................................8References.................................................................................................................................................101
IntroductionPankaj Ghemawat gave a framework for the global strategy which is known as the AAA theoryor strategy i.e. Adaptation, Aggregation, and Arbitrage strategies. These are the genericapproaches that enable the companies in creating a global value. The theory of adaptation saysthat when the company changes its few elements and meets the requirements of the people in themarket, then it is able to create a global value for itself (Ghemawat, 2013). Most of thecompanies use this global strategy for creating value as they earn more profits and acquiregreater market share. Adaptation strategies are of five types: focus, variation, design, innovationand externalization strategies. The theory of aggregation says that when the companies exploitthe geographical similarities, and they do not adapt to the differences, they create global valuefor themselves by achieving economies of scale and economies of scope. But in these strategies,the local responsiveness is not compromised (Ghemawat, 2013). Unlike aggregation, thearbitrage theory says that when the companies exploit the differences, they create global value.In this, the companies do not adapt to the differences, but they exploit them. Arbitrage can becultural, administrative, geographic or economic. In this report, the strategies related to adaptation, aggregation and arbitrage will be used toexplain that how the different companies i.e. Coca-Cola Amatil and Haigh’s Chocolates fromFood and Beverage Industry and Technology One and Iress from Computer Software industryuse this theory for the pursuit of their business. 2
AAA ModelIndustry 1: Food and Beverage Company A: Coca-Cola AmatilCompany B: Haigh’s ChocolatesAdaptationThe company sells its products inmany countries apart from Australialike Europe, USA, etc. But it tastesdifferent in different countries. Thetaste of this drink is different inEurope and the USA. The qualityand the sugar that is being added areas per the preferences and liking ofthe people in these countries. Thismeans that the company hasproduced the product as per the localpreferences of the people in thesecountries. It has used the variationadaptation strategy as it has madechanges in the product as per themarkers of the countries in which itserves (Metzger, 2014). This madethe company acquire the marketshare many countries and themcompany is also earning hugeamount of money in terms ofThe chocolates were sold in the countryfor consumption, but they could not begifted because the packaging and the pricewere such that the people did not find itworth gifting to their friends or the lovedones. So, Haigh’s introduced the hand-made chocolates for the young people andthe couples for both purposes i.e. giftingand consumption. The chocolates had thepremium price that met the giftingrequirements of the people (Chan, 2012).So, the company adapted to the localgifting requirements of the people andhence its sales increased in the market.Since them the market for these chocolatesin Australia is unbeatable and it is soldeverywhere that shows that the companyhas acquired a major share of the market. 3
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