Aaa Framework

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Ghemawat’s “AAA” Global Strategy Framework Ghemawat so-called AAA framework offers three generic approaches to global value creation. Adaptation strategies strategies that seek to increase revenues and market share by tailoring one or more components of a firm’s business model to suit local requirements or preferences. Aggregation strategies focus on achieving economies of scale or scope by creating regional or global efficiencies; they typically involve standardizing a significant portion of the value proposition and grouping together development and production processes. Arbitrage is about exploiting economic or other differences between national or regional markets, usually by locating separate parts of the supply chain in different…show more content…
Finally, a segment focus involves targeting a more limited customer base. Rather than adapting a product or service, a company using this strategy chooses to accept the reality that without modification, their products will appeal to a smaller market segment or different distributor network from those in the domestic market. Many luxury good manufacturers use this approach. Whereas focus strategies overcome regional differences by narrowing scope, externalization strategies. Strategies that transfer responsibility for specific parts of a firm’s business model to partner firms to accommodate local requirements, lower cost, or reduce risk. transfer—through strategic alliances, franchising, user adaptation, or networking—responsibility for specific parts of a company’s business model to partner companies to accommodate local requirements, lower cost, or reduce risk. For example, Eli Lilly extensively uses strategic alliances abroad for drug development and testing. McDonald’s growth strategy abroad uses franchising as well as company-owned stores. And software companies heavily depend on both user adaptation and networking for the development of applications for their basic software platforms. A fourth type of adaptation focuses on design Strategies that focus on design flexibility and standardization to reduce the cost of variation. to
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