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AAA STRATEGY

AAA TRIANGLE

ADAPTATION: This is AGGREGATION : This ARBITRAGE: In this strategy


one the most used strategy seeks to revenue neither the local market
strategy out of the by creating regional and demand nor the bridging
three. Those companies global efficiencies by different market. In this
who wants to increase standardization of strategy the company
the revenue by tailoring product. They centralize exploits the differences in
their products with where raw material and the market i.e. it buys raw
reference to the local land labor cost is low. material from cheaper place
market. These Companies tend to and sells where the price is
companies tend to influence already higher. It uses specialization
adapt changes which established products into
are favored mostly in the new market by
the local area. advertising.
The company which
involve in a lot of R&D
deals in aggregation.
Adaptation Agregration Arbritrage
Why to globalize? To seek revenue To seek revenue To seek revenue by
from the local through exploiting market
market economies standardization of through
product specialization.
Which type of Country centered Cross border Vertical or
organization organization organization functional
follows: organization
How to the Companies with a Companies which Companies which
companies lot of advertising involve a lot of are labor intensive.
globalize: R&D.
How to approach Addressing the Avoids the Addresses the
corporate issue of the appearance of exploitation of
diplomacy concern with the homogenization suppliers which are
local market kept in and is sensitive to more prone to
mind. public reaction. political disruption.
What type of Too much of variety Too much of Narrowing spreads.
extremes to be standardization
watched for ?
CONCLUSION

When managers first hear about the broad strategies that make up the AAA
triangle framework for globalization, their most common response by far is
Lets do all three. But its not that simple. A close look at the three strategies
reveals the differences and tensions among them. Business leaders must
figure out which elements will meet their companies needs and prioritize
accordingly.