Competitive Strategies Report: AAA Framework for Global Expansion

This report provides an analysis of competitive strategies, focusing on the AAA framework (Adaptation, Aggregation, and Arbitrage), and its application in global business. It examines how companies in the food and beverage sector (Frosty Boy and Home-Tyme) and the computer industry (Access Technology Group Limited and Accumuli plc) utilize these strategies to achieve a competitive advantage. The report details how adaptation helps companies meet local market demands and technological changes, aggregation facilitates market expansion and resource management, and arbitrage reduces costs through strategic sourcing and location advantages. The study concludes that the AAA framework contributes significantly to cost management, market expansion, and technological adaptation for these companies, emphasizing the importance of tailoring strategies based on global dynamics and financial considerations. The report also acknowledges challenges such as supply chain issues and information gaps, highlighting the relevance of these strategies in a competitive global environment.

COMPETATIVE
STRATERGIE

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
CONCLUSION................................................................................................................................7
REFRENCES...................................................................................................................................8

INTRODUCTION
Following report is prepared in order to understand the different competitive strategies
which are adopted by the different companies of different countries which help them in doing
effective business. Competitive strategies can be defined as planning done for future so that
competitive advantage can be enjoyed in the future. It is done by having more effective strategies
than that of the competitors present in the market. The total rate of return from investment is
increased by adopting a creative strategy or the business. As the competition is increasing it
increases various challenges also for which companies need to adopt different strategies in order
to face these competition more effectively so that it can success in its field. In the following
report companies are taken from the food and beverage sector and another from the computer
industry (Madsen and Walker,2015). These companies in order to supply services at global level
use different strategies which helped them in making their global presence. This report will help
learner to understand how these companies are using the different AAA i.e. adaption,
aggregation and arbitrage in order to increase their revenues by facing the global challenges and
giving the other companies a good competition.
TASK 1
For any business to excel it is important that strategies are followed so that the company
can compete with the other competitors present in the same field. AAA strategy is one of the
different strategies which were developed Ghemawat. It is also known as AAA triangle theory.
In this theory each A stands for adaption, aggregation and arbitrage. These strategies aims to
decide the best strategy for the business through international expansions. If the companies want
to enjoy full benefits than these approaches should be implemented effectively. In general these
strategies help any business by increasing their revenues by growing their local revenues and
also deliver economies of scale through global operations. Also through this strategy the supply
chain of the business is made efficient by removing the disparities from national and regional
market. There are different examples of how various organisation use and keep balance in these
strategies although it is difficult to achieve all the tree strategies as it require a good amount of
resources and this makes it difficult to keep balance among all (De and Meyer,2010). Before
choosing the given three strategies it is important that the companies focus on the nature and
strength before deciding about the primary policy. Adaption calls for the required changes that a

particular company need to adopt in order to meet the demand in the market. It is done so that the
companies operations remain matched with the functioning of the other companies in the same
field. Than aggregation helps the business in increasing the scale of market by reaching to global
market without actually ignoring the demands of the local buyers. Than comes the arbitrage
which help the business in choosing the market which can give maximum profit to the business
due to change in the cost and price of the products. This help the business in choosing the market
which can provide the different factors of production at the minimum price and therefore the
total profit can be increased. These strategies therefore help in facing the various global
challenges and also increases the market by providing the services to the customers of different
places having the same needs. Although different A strategy has different level of effectiveness
and also require resources to implement in the business which make it difficult to implement
them successfully and therefore it is the decision of the company to weather adopt al the three A
in the business or some of them (Teece,2010).
In order to get a clear understanding of each strategy it can be compared how it is utilised
in different companies like as follows:
Adaption in computer industry and food business
Frosty boy is an Australian company which provides best soft serve and frozen yogurt. It
manufactures quality products for the customers since 1976. After this Home-Tyme is another
company which is in Canada and providing the services to the customers since 1992. This
company is known for the meat products which are provided at too reduced price and with no
taxes. Both these companies has provided various job opportunities in the places where they are
operating. Theses companies are doing good business still there are various challenges which are
faced by them (De and Meyer,2010). They have successfully implemented the strategy of three
A so that they can maintain their growth. These companies uses water as their main ingredient
like in the cleaning or as a cooling agent. Therefore if there is a change in the environment in
context of the availability of water it affects the operations of the cited companies. It creates
problem as less water is available in comparison to demand against them. As the food industries
demand large amount of quality water they need to adopt the measures in text with the top
quality available method so that they can overcome this barrier. The Frosty boy and Home-
Tyme through widespread adoption of water can move towards sustainable improvement
achieving in connection of economical development from resource use as effect to bring down

water availability (Porter,2012). Apart from this adaption help the two companies in adapting the
preference of the customers of the local market and help the food industries in bringing change
and innovation in their products so that the customers are provided with what taste they want.
Different taste is prefer at different part of countries due to change in culture therefore adapting
the need of customer the food items are therefore provided accordingly (Bharadwaj,2013). The
cited companies has also adopted the new techniques of packaging which helped both these
companies in using an innovative type of packing the products which are more attractive and are
preferred by the customers. Apart from attractiveness this adaption also helped them these
companies in packing the products in such a way that customer can carry it with themselves
comfortably. Not only this, adaption has proved to be of great help for the computer industries
also but in a different manner as the challenges for this industry is different. Continuous change
take place in the technology which create need for adaption. Both the companies Access
technology group limited of east England and Accumuli plc of south east England took the
benefits through adopting to change in the technology that take place in the computer world so
that they can compete with other companies of the same industry. As both these companies are
operating on small scale innovation helped them in doping the market expansion, cutting the
total cost (Casadesus and Ricart,2010).
Aggregation in computer industry and food business
Aggregation is the process through which standards are set so that the existing economies
of scale can be utilised. Companies are benefited through this strategy as they cover more market
with the same products through doing the active marketing and advertising. As in the food
industry human resource is the main requirement as without it process can not be taken to further
stages. With the help aggregation both these food companies are benefited in making the
required number of employees available so that they can meet the future demand and also apart
from human resources also these companies with the help of aggregation strategies maintain the
required amount of stock with them so that continuity in the supply of food products can be
maintained (Grant,2016). Both these companies has used the manageable modes for increasing
their total revenue by opening stores in different part of the countries and also by giving
franchisees to the different agents which helped in market maximisation. Other companies like
Access technology and Accumuli plc use the same strategy in dealing with the differences. The
strategy of aggregation help the cited two companies to identify scope in the global market and

also do not compromise with the domestic customers. This shows that geographic aggregation
strategies are of vital use to the these industries. Cultural aggregation help these companies in
providing the different customers with their variety of demands.
Arbitrage in computer industry and food business
It is the third strategy among the different strategies of operation. Arbitrage helps in
reducing the cost of labour and material without actually changing own location. It discovers the
difference between the benefits of different locations so tat the total cost of production can be
minimised to minimum (Santos,López and Trespalacios2012). It also helps in creating the global
advantage to the company. In this strategy the differences are discovered and than bridged so that
advantage can be taken. Outsourcing is much adopted in this strategy. Suppose if it is absorbed
that for home time food company it is better to get the products ready made from other source
and than sell those by their own is more beneficial than the company can go for it. This way the
total cost will be reduced which will increase profit margin for the company. Arbitrage is further
classified into cultural arbitrage. People from different culture demand different food items also
different taste therefore it is important to provide them with what the actually want. The
difference in the laws and legislations of the different countries also create an possibility for
administrative arbitrage. Different taxes are imposed on the different sector and the rate of tax
also varies therefore the companies can reduce the payments of interest by using the deals which
create profitable finance dealings. Geographic arbitrage is the another scope provided in the
same strategy (McGrath,2013). This concept helped the business by removing the location
constraint from the business. Now companies can deliver its products to different areas and cover
more market. This helped all the above four companies in acquiring more consumers. The
companies that are dealing in the computer field are benefited by getting the knowledge from
across the countries which help them in being updated with the latest changes that take place in
their industry. After this is the economic arbitrage which originated due to the change in total
cost of labour and capital and the cost of complimentary products which are different at different
places. Food industry is benefited through this arbitration by exploiting the cheap labour (Kristal,
Huang and Roth,2010).

Food business(A,B) Computer industry (A,B)
Aggregation Cost reduction through
new stores.
Achieve economies of scale
Arbitrage Performance enhancement Risk reduction.
Adaption Meet the future demand
for labour.
Product variety
remove barriers
Innovations
Reduce cost
CONCLUSION
The above report concludes that the strategy of AAA has successfully contributed in the
growth and development of the frosty boy, home tyme, access technology group limited and
Accumuli plc. These strategies helped the cited companies in managing their total cost,
expanding the market, adopting to new technology (Porter,2011). The report suggest that
different strategies should be adopted on the basis of the global history and its financial
statements. All these strategies are not required to be implemented together but may be at some
point in future all need to be line down. There are different challenges which are faced by the
different companies of different industries like lengthy supply chain or security or lack of
information. Therefore in this case these strategies are of much help. In this competitive era
where all the companies are trying to prove themselves better than each other works on their
quality policies and reduce price these strategies are of great help.

REFRENCES
Books and journals
Madsen, T.L. and Walker, G., 2015.Modern competitive strategy. McGraw Hill.
De Wit, B. and Meyer, R., 2010.Strategy synthesis: Resolving strategy paradoxes to create
competitive advantage. Cengage Learning EMEA.
Teece, D.J., 2010. Business models, business strategy and innovation.Long range
planning.43(2). pp.172-194.
Porter, M.E., 2012. Competitive strategy: Techniques for analyzing industries and
competitors.Revista Inteligência Competitiva.2(2).
Casadesus-Masanell, R. and Ricart, J.E., 2010. From strategy to business models and onto
tactics.Long range planning.43(2). pp.195-215.
Grant, R.M., 2016.Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Santos-Vijande, M.L., López-Sánchez, J.Á. and Trespalacios, J.A., 2012. How organizational
learning affects a firm's flexibility, competitive strategy, and performance.Journal of Business
Research.65(8). pp.1079-1089.
McGrath, R.G., 2013..The end of competitive advantage: How to keep your strategy moving as
fast as your business. Harvard Business Review Press.
Kristal, M.M., Huang, X. and Roth, A.V., 2010. The effect of an ambidextrous supply chain
strategy on combinative competitive capabilities and business performance.Journal of
Operations Management.28(5). pp.415-429.
Porter, M.E., 2011.Competitive advantage of nations: creating and sustaining superior
performance. Simon and Schuster.
Bharadwaj, A., et.al.,N.V., 2013. Digital business strategy: toward a next generation of insights.
De Wit, B. and Meyer, R., 2010.Strategy: Process, content, context. Cengage Learning EMEA.
ONLINE
Ghemawat’s “AAA” Global Strategy Framework 2015.[Online] Available
through<http://www.opentextbooks.org.hk/ditatopic/26822> Accessed on [27th May 2017].