Complex And Competitive Strategy For Business Organizations

AAA (Adaptation, Aggregation, and Arbitrage) Framework

Discuss about the Complex and Competitive Strategy for Business Organizations.

The current business environment is highly complex and competitive. In current, all the business organizations use a lot of tools and techniques to accomplish competitive advantages over the competitors. In current, AAA (Adaptation, Aggregation, and Arbitrage) framework has become the first choice of the business associations. The ‘AAA framework’ plays a significant role to improve the organizational performance, reduce costs, and to offer competitive advantages to the business firms. Along with this, this research paper would be beneficial to understand the importance of ‘AAA framework’ for the growth and success of the business organizations. Moreover, for this research paper, I would like to pick Food / Beverage Industry and Manufacturing of heavy equipment industry (Car industry) to demonstrate the significance of ‘AAA framework’ in an effective and a significant manner. In addition, I would like to choose Coca-Cola Amatil and McDonald’s Australia under the Food / Beverage Industry.  Furthermore, I would like to pick Toyota Australia and Hyundai Australia under the Manufacturing of heavy equipment industry. Overall, this research paper would be valuable to provide an overview about how these industries are using ‘AAA framework’ in their relative companies to accomplish the competitive advantages in an effective manner.

The ‘AAA framework’ involves three strategies: adaptation, aggregation, and arbitrage that play a major role to create value for the business firms. For case, adaptation strategy is beneficial to increase revenues and market share of the organizations. Moreover, with the help of adaption strategy, business firms modify the components of business models to fulfill the requirements and preferences of customers (Hubbard, Rice and Galvin, 2014). Along with this, aggregation strategy plays a major role to provide economies of scale to the business firms. For case, with the help of aggregation strategy, business firms develop global efficiencies to achieve economies of scale in an effective way. In addition to this, arbitrage strategy plays an important role to explore cultural, economic, and geographical differences between national or regional markets. Moreover, with the help of arbitrage strategy, business firms locate supply chain in different places to reduce these differences in an effective and a more comprehensive manner (Heinecke, 2011).

In addition to this, it should also be noted down that, the selected industries Food / Beverage   and Manufacturing of heavy equipment industries have used ‘AAA framework’ for the pursuit of their businesses in an effective way. The below given below table is useful to understand that how the different industries have used ‘AAA framework’ or adaptation, aggregation, and arbitrage strategies in their relative business organizations: 

Strategy Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Food/ Beverage Industry	Manufacturing of Heavy Equipment Industry
	Coca-Cola	McDonald’s	Toyota	Hyundai
Adaptation	Variation	Innovation	Design	Innovation
Aggregation	Geographic	Cultural	Geographic	Geographic
Arbitrage	Cost Reduction	Performance Improvement	Performance Improvement	Cost Reduction

Adaptation Theory

Adaption is the first and major theory of ‘AAA framework’. The adaption theory is essential to create value for the business firms at the global level. Moreover, variation, innovation, externalization, focus, and design are the major approaches of adaption theory (Mauri and de Figueiredo, 2012). Along with this, it should also be noted down that, the selected business industries have used adoption theory in their relative business firms to accomplish competitive advantages in an effective and an appropriate manner.

Food / Beverage Industry:  Food / Beverage Industry mainly adopt and implements variation and innovation approach of adaption strategy in order to fulfill the requirements or preferences of local customers in an effective way. For case, the food & beverage company Coca-Cola implements variation approach to fulfill the needs and desires of local customers in a proper way (CCA. 2016). Moreover, under this approach, Coca-Cola is offering different products such as: DietCoke, Fanta, Vox, Sprite, Sprite Zero, Bisleri, Vodka O, Nestea, Coca-Cola Vanilla, Coca-Cola Zero, Lift, Kirks, etc. to meet the requirements and to accomplish competitive advantages over the competitors.  Along with this, it should also be noted down that, with the help of this variation approach, Coca-Cola is still exists in the marketplace and also popular among the customers. The different variants of Coca-Cola’s products are helpful to create value and image of the firm in the minds of its customers (Morschett, Schramm-Klein and Zentes, 2015). In this way, Coca-Cola has used adaption strategy for the pursuit of its business in today’s competitive marketplace.

Along with this, McDonald’s focuses on innovation approach of adaption strategy to achieve organizational goals & objective and competitive advantages in an effective way. The competitors of McDonald’s are offering different products/services to their customers in different ways (McDonald’s Australia. 2016). In that case, McDonald’s also implements innovation approach to fulfill the requirements and preferences of customers. McDonald’s focuses on innovative products/services to suit the requirements of its customers. McDonald’s is offering Sandwiches, Salads, French fries, etc. to satisfy the needs of both vegetarian and non-vegetarian customers in an equal way. Along with this, McDonald’s focuses on innovative promotional strategies and innovative product designs to promote its products and attract & retain customers in an appropriate way (Jha, Dhanaraj and Krishnan, 2015). Moreover, with the help of the innovation approach, McDonald’s become able to improve its revenues, market share and market position in the global market.

Food / Beverage Industry

Manufacturing of Heavy Equipment Industry: Manufacturing of heavy equipment industry like car industry mainly use design approach of adaption strategy for the pursuit of its business. The design approach plays a significant role to reduce the costs and introduce design flexibilities & standards in an effective way (Buckley and Ghauri, 2015). For case, the car manufacturing firm Toyota motors focuses on design approach to produce cars as per the needs and requirements of the customers.  The company used design approach to produce its cars such as: Yaris, Camry, Corolla, 86, and Aurion. Moreover, Toyota used different designs in its products SUV & 4WD cars like: RAV4, Fortune, LndCruiser200, FJCruiser, Prado, and Kluger. The main focus of Toyota is on the different designs of the products (Toyota. 2016).  Along with this, Toyota produces Cars, Hybrids, SUV & 4WD, and Utes & Vans in order to fulfill the requirements of all types of customers in an effective and an appropriate manner.

On the other hand, it should also be noted down that, Hyundai adopts and implements innovation approach of adoption strategy to best suit the requirements or preferences of customers. Hyundai uses innovative techniques to produces its cars (Hyundai. 2016). It also emphasizes on the modern interior and exterior of the cars. For case, Genesis, Veloster, Tucson, i30, i40, iMax, and so on are the innovative car models of Hyundai. Moreover, the firm also produces cars to fulfill the needs and requirements of all types of customers in an effective and an appropriate way. Along with this, it should also be noted down that, due to innovative designs, Hyundai has become the top cae of the year 2015 (Gooderham, Gooderham and Grøgaard, 2013).

Aggregation theory plays a significant role to offer economies of scale to the business firms. The aggregation theory of ‘AAA framework’ develops standardization and value proposition to the business organizations (Jovanović, Todorović and Komazec, n.a.). Moreover, the Food / Beverage Industry and Manufacturing of heavy equipment industry also focus on aggregation theory for the pursuit of their businesses.

Food / Beverage Industry: The food & beverage company coca-cola focuses on geographic approach of aggregation strategy.  Coca-cola uses this approach to establish plants and stores in different geographical areas to cover all the customers in an effective way (Ramsey, Alvim, Forteza and Micheloni, 2010). Moreover, with the help of this approach, Coca-Cola became able to create regional or global efficiencies and to achieve economies of scale/scope in an effective and a proper manner. On the other hand, McDonald’s pays its attention on the cultural approach to satisfy the needs and desires of the people those belong to different culture. For case, with the help of cultural approach, the firm understands the tastes & favorites of customers and also modifies products/services to fulfill the customers’ requirements or preferences effectively (Outterson, 2013). Moreover, the cultural approach also plays a major role to reduce the costs, increase the revenues, and to create value to the firm.  

Manufacturing of Heavy Equipment Industry

Manufacturing of Heavy Equipment Industry: The car industry mainly focuses in the geographic approach of aggregation strategy to accomplish the business goals and objectives in an effective and a significant manner. For case, Toyota moors emphasis on geographic approach to locate its stores as well as plants in different geographical locations. Moreover, this approach is beneficial to Toyota to build strategic partnerships with partners or suppliers to meet the requirements of the customers in an effective way. Also, with the help of this approach, Toyota also becomes able to reduce geographical differences between nations (Tihanyi, Pedersen, Devinney and Banalieva, 2015). In the same manner, Hyundai also focuses on geographic aggregation approach to set up its new outlets in different geographical locations or areas. Moreover, with the help of this approach, Hyundai become able to cover its target areas and customers in an effective way. Hyundai also become able to develop supply chains in different geographical areas to attract new customers and to retain existing customers (Lee, Jeon, Kim, and Kim, 2010). In this way, it can be said that,   Food / Beverage Industry and Manufacturing of heavy equipment industry have used ‘AAA framework’ for the pursuit of their businesses.

The arbitrage theory of ‘AAA framework’ shows the cultural, administrative, geographic, and economic differences between regional/national markets. Moreover, cost reduction, performance improvement, risk minimization, and so on is the major approaches of arbitrage theory. This theory plays a major role to set up separate parts of the supply chain in different places to create global advantages for business firms (Hubbard, Rice and Galvin, 2014). Along with this, it should also be noted down that Food / Beverage and Manufacturing of heavy equipment industries also use arbitrage theory to improve the overall efficiency of business firms.

Food / Beverage Industry: Food/Beverage Company Coca-Cola uses cost reduction approach to reduce different operational costs associated to the business. Coca-Cola wants to expand its business in different geographical areas that increase the costs of the firm. In this situation, with the help of cost reduction approach, Coca-Cola become able to establish supply chain in different locations in order to reduce the costs and enhance the revenues in an effective and a more comprehensive manner (Heinecke, 2011). Moreover, the cost reduction approach is also useful to decrease added costs and improve goodwill of the firm at the global level. Along with this, McDonald’s focuses on performance improvement approach to spread out its business in different geographical areas. Moreover, it should also be noted down that, with the help of performance improvement approach, McDonald’s become proficient to improve its organizational performance in an effective way.

Aggregation Theory

Manufacturing of Heavy Equipment Industry: The car industry mainly focuses on performance improvement and cost reduction approaches to cover all the customers. For case, Toyota motors adopt and implement performance improvement approach to improve organizational effectiveness and performance effectively. Moreover, with the help of this approach, Toyota established different parts of supply chains in different geographic areas to target more and more customers. Moreover, the approach also plays a major role to improve the performance of firm in local and global market (Morschett, Schramm-Klein and Zentes, 2015). Along with this, Hyundai uses cost reduction strategy to cover the middle class customers in a proper way.   Hyundai focuses on cost reduction strategy to utilize the available resources in order to manufacture products at lower costs. Moreover, with the help of cost reduction approach, Hyundai become successful to distinguish itself from its competitors. For this reason it can be said that, business organizations have used AAA framework for the pursuit of their businesses.

Conclusion

On the basis of the above conversation, it can be assumed that, ‘AAA framework’ is precious for business firms in order to accomplish strategic and competitive goals & objctives of the business. Along with this, it is also observed that, in current, most of the business firms take help of the ‘AAA (adaptation, aggregation and arbitrage) framework’ in order to create unique image and reputation at the global level.

References

Buckley, P.J. and Ghauri, P.N. (2015). International Business Strategy: Theory and Practice. NY: Routledge.

CCA. (2016). About Us. Available At: https://www.ccamatil.com/ [Accessed On: 14^th Sep. 2016]

Gooderham, P.N., Gooderham, P.N. and Grøgaard, B. (2013). International Management: Theory and Practice. UK: Edward Elgar Publishing.

Heinecke, P. (2011). Success Factors of Regional Strategies for Multinational Corporations: Appropriate Degrees of Management Autonomy and Product Adaptation. USA: Springer Science & Business Media.

Hubbard, G., Rice, J. and Galvin, P. (2014). Strategic Management. Australia: Pearson Australia. Hyundai. (2016). About Us. Available At: https://www.hyundai.com.au/ [Accessed On: 14^th Sep. 2016].

Jha, S., Dhanaraj, C. and Krishnan, R. (2015). How Does Multinational R&D Evolve In Emerging Markets? Available At: https://www.imd.org/research/publications/upload/2015-2-How-Does-Multinational-RandD-Evolve-in-Emerging-Markets-13-04-15.pdf

Jovanović, M., Todorović, I. and Komazec, S. (n.a.). The Need For A Multidisciplinary Approach In Developing And Implementing A Global Strategy. Econophysics, Sociophysics & Other Multidisciplinary Sciences Journal (ESMSJ) Staff, p.26.

Lee, S.H., Jeon, R.K., Kim, J.H. and Kim, J.J. (2010). Strategies for developing countries to expand their shares in the global construction market: phase-based SWOT and AAA analyses of Korea. Journal of Construction Engineering and Management, 137(6), pp.460-470.

Mauri, A.J. and de Figueiredo, J.N. (2012). Strategic patterns of internationalization and performance variability: effects of US-based MNC cross-border dispersion, integration, and outsourcing. Journal of International Management, 18(1), pp.38-51.

McDonald’s Australia. (2016). About Macca’s. [Online]. Available at: https://mcdonalds.com.au/about-maccas [Accessed On: 14^th Sep. 2016].

Morschett, D., Schramm-Klein, H. and Zentes, J. (2015). Strategic International Management: Text and Cases. USA: Springer.

Outterson, K. (2013). Pharmaceutical Arbitrage: balancing access and innovation in international prescription drug markets. Yale Journal of Health Policy, Law, and Ethics, 5(1), p.4.

Ramsey, J.R., Alvim, F., Forteza, J.H. and Micheloni, J. (2010). International value creation: An alternative model for Latin American Multinationals. GCG: Revista de Globalización, Competitividad and Gobernabilidad, 4(3), pp.62-83.

Tihanyi, L., Pedersen, T., Devinney, T.M. and Banalieva, E. (2015). Emerging Economies and Multinational Enterprises. UK: Emerald Group Publishing.

Toyota. (2016). About Us. Available At: https://www3.toyota.com.au/home [Accessed On: 14^th Sep. 2016]