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Redefining Global Strategy : Crossing Borders

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Discuss about the Redefining Global Strategy for Crossing Borders.



Pankaj Ghemawat’s AAA strategic framework helps the organisation to gain a competitive advantage in the market because this helps the organisation to have global value creation. The AAA here stands for Adaptation, Arbitration and Aggregation. The adaptation strategy helps the organisation to suit the local preferences of a country to carry out their business. The aggregation strategy helps the organisation to create global efficiencies by achieving the economies of scale and the Arbitration strategy helps the firm to gain competitive advantage through exploiting economic and various other differences through the national and the regional markets that are there (Ghemawat, 2013). The "A" strategy that the organisation would choose would depend on the financial position and outlook of the firm, for example, if a company depends heavily on the branding, such as the food and beverages producing firms should adopt the Adaptation strategy (Ghemawat, 2015). Most of the companies such as Nestle and IBM focus on just one "A" strategy and the focus is not there much on the other As because a shift from "A" to "AA" to "AAA" would require both managerial and organisational flexibility. It is because there is an inherent tension between the three “A”s that are being identified by Ghemawat. The most important pitfall of this particular theory is that the organisation should use one or the two ‘A's of the strategy. If new elements are incorporated in the strategy then it should get fit in the organisational structure. Moreover, if the strategy incorporates new components then the firm should see that they doing well with the other operations that are being carried out by the organisation (Ghemawat, 2013).

Metcash Limited is a wholesale marketing and distributing company that have a specialization with respect to grocery, hardware, liquor, fresh produce and the other fast moving items that are there. The organisation also operates under few of the very reputed brand such as Mitre 10, IGA and Cellarbrations. The company has two important subsections the ALM or the Australian Liquor Market and the Independent Brand Australia or the IBA. The ALM owns the Tasman Liquor Company and it is a wholly owned organisation that carried out its operation in the similar market of New Zealand (Metcash Limited., 2017). Therefore, this particular organisation could adopt the AAA strategy as proposed by Pankaj Ghemawat to gain a competitive advantage in the global market. In the case of this firm only one A could be feasible for the organisation to gain success and that is the Adaptation strategy. The firm should focus on the externalisation strategies that forms a subpart of this particular framework or the strategy. Therefore, it should go for having strategic alliances with the other companies in various other countries. It could also expand itself through franchising as well. In the case of having strategic alliances, it could choose the reputed hotels, restaurants and the liquor stores that are there in the country. Moreover, it could also create global value by having a strategic alliance with the firm belonging to the travel and the tourism industry that would also help them to gather competitive advantage.


The Business Model

The business model consists of four important components that include the value proposition, market participation, value chain infrastructure and the management model. The value proposition consists of products and services that are both tangible and non-tangible. The market segments include that particular segment in the market that the firm would choose to expand their business (Bocken,, 2015). The value chain infrastructure deals with the key capabilities and the internal sources that are there. The management model includes global management sub model that includes the global product divisions and the organisational structure. Therefore, while the company decided to go for global expansion they should take into consideration every single element that is there in the model (DaSilva and Trkman, 2014). Therefore, if the company decided to take the value proposition into consideration then they should decide whether or not they should modify their product and the services or not. Therefore, the choice is linked with the fact that to which market the firm is entering and why it is entering along with how it is entering the market. Therefore, the crafting of the global strategy depends on how the firm would adopt with their core business model and at the same time, it deals with how the organisation would gain competitive advantage through their globalised operations. The particular term here has been coined by two important people and those are Michael Treacy and Fred Wiersema. According to them, the principle value propositions that are there in the business model are regarded as the value disciplines that are there in the business model. The critics often push the boundaries of the value discipline, in order to meet the industry standards that are there. The main reason behind this is that the market leaders not only take into consideration the consumer preferences but also at the same time, tries to align the entire business model in order to serve the chosen value discipline as well (Morris,, 2015).

The National Australian Bank could expand their business in the global market with the help of the value discipline that is there in the country. The value discipline of the company helps the organisation to not only perform over the time but also at the same time, it helps the firm to provide assistance and the help to the customers as well. The organisation maintains transparency and this is another reason behind the success of the organisation. Therefore, the organisation has provided around $300 million home lending to the people and in the case of the business lending, the amount is around $200 million. Therefore, it can be said that these steps alongside the value chain have been taken to help the customers. It is something that could actually help the organisation to receive a good customer base. Therefore, with respect to the achievement regarding the Net Promoter Score, the organisation has achieved the leading position and this has also lead to the success of the organisation in the country (, 2017). Therefore, the value proposition in the value chain could help the organisation to expand in the global market.



Bocken, N.M.P., Short, S.W., Rana, P. and Evans, S., 2014. A literature and practice review to develop sustainable business model archetypes. Journal of cleaner production, 65, pp.42-56.

DaSilva, C.M. and Trkman, P., 2014. Business model: What it is and what it is not. Long range planning, 47(6), pp.379-389. (2017). Value Chain - NAB. (2017). Values-aligned Culture | Our Approach - NAB.

Ghemawat, P., 2013. Redefining global strategy: Crossing borders in a world where differences still matter. Harvard Business Press.

Ghemawat, P., 2015. From International Business to Intranational Business. In Emerging Economies and Multinational Enterprises (pp. 5-28). Emerald Group Publishing Limited.

Metcash Limited. (2017). About The Company - Metcash Limited..

Morris, M., Schindehutte, M., Richardson, J. and Allen, J., 2015. Is the business model a useful strategic concept? Conceptual, theoretical, and empirical insights. Journal of Small Business Strategy, 17(1), pp.27-50.


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