Evaluating Apple's International Business Strategy Using AAA Model

This essay examines Apple's international business strategy, focusing on the adaptation, aggregation, and arbitrage (AAA) framework. It highlights how Apple uses adaptation strategies by leveraging the internet and social media for product promotion and customer feedback, enhancing market share and customer satisfaction. The essay also discusses aggregation strategies, noting Apple's acquisitions and global initiatives, such as expanding into Latin America and Europe, and acquiring Shazam to enhance its service offerings. Furthermore, it explores arbitrage strategies, using the example of iPhone pricing differences across regions to capitalize on market variations and increase profitability. The analysis demonstrates how Apple effectively employs these strategies to create global value and maintain a competitive edge in the international market. This document is available on Desklib, a platform offering a wide range of study resources for students.

International business 1
International business
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International business 2
International business
Apple is an American international company that develops, designs and sells user
electronics (Maryanne 2012, P.33). This company is one of the largest contributors to the
government revenue with more than $10 billion per year. This is due to the business strategies
adopted in selling their products.
Using Ghemawat AAA assessment, Apple Company has adopted the three approaches
which include adaptation, aggregation and arbitrage strategies to generate its global value.
Adaptation strategies involve increasing revenue and market share by modifying one or more
components of the company’s trade model to suit local requirements and preferences (Arindam
2017, P.7). For the Apple Company, it has adopted the use of the internet to sell its products.
This has enabled it to reach many customers hence increasing its market share. They have also
created an application through social media platforms such as Facebook whereby customers are
required to give feedback about their products. Since many people are addicted to the use of
technology, Apple Company has taken this advantage to position their products to their targeted
customers (Melek & Semih 2016, P.6). Through social media, the company is able to convince
many customers at one time about their unique products.
According to Seric (2014, P.52), Apple Company buys most of their products from
manufactures who are creative and innovative. This has enabled them to meet the requirements
of its customers hence increasing the market share. It has also helped the company to stand out
competition hence creating great global value. Customer satisfaction not only increases the
company’s market share but also improves the relationship with its consumers.

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On the other hand, aggregation strategies is emphasize of attaining economies of scale
through coming up with local or global competencies. (Margaret & Patrice 2016, P.8). Apple has
set out outstanding growth strategies which have made it to be the leader in not only the United
States but also in the international market. It management has recognized the need to look for
growth in highly competitive markets and began a series of acquisitions which gave them enough
resources to operate in the international market. In this process, Apple Company has created
masses of relationships with customers across the world.
Apple’s global initiative is to establish and expand across the world. Recently, it has
adopted in designing and selling watches which has given them a solid operations base. In the
northern region, this company has established its longtime participation in Latin American and
created a presence in Mexico as electronics joint venture partner. According to Ellen (2011,
P.32), Apple had attained a substantial competitive power in Latin America and Europe by the
end of 2010 and was launching a production and marketing base in London. In December 2017,
Apple acquired shazam, a music-identifying application which enabled them to provide more to
the consumers in gradually competitive global markets. This increased economies of scale in the
company. It also expanded its collection of creative, high quality electronics and services to the
consumers.
According to Maryanne (2012, P.31), arbitrage is also another technique used by
companies to realize a global advantage. This is a way of exploiting differences apart from
embracing or bridging them. For example, this may mean selling products at low or high prices
in certain regions than others. Recently, Apple Company introduced an iPhone 5c which was
trading at $549. Due to various taxes and import fees, the phone sells at $549 in New York and

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$731 in Beijing. The price difference was set to give an opportunity to any consumer who can
find a low cost way around those import and tax fees. This way has enabled Apple products
available to everyone hence increasing the market share. It has also helped the company to make
huge profits by exploiting price differences of their commodities.

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References
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Margaret, G & Patrice, L 2016, Competitiveness and Sustainability in a
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Maryanne, MG 2012, Innovation and Strategy, Research-Technology Management, VOL.55,
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Melek, E & Semih, E 2016, the Effects of Interactions between Management Control Systems
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VOL.7, NO.1, PP 50-56