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Global Strategies AAA

Global corporate strategy is an important element of any corporate strategy. In this video, we discuss generic strategies for global corporate scope, using Pankaj Ghemawat's AAA framework. Aggregation strategies are used to concentrate parts of the value chain in fewer locations (often one, but sometimes aggregated to the regional level), to achieve economies of scale. Adaptation replicates part of the value chain in multiple countries or regions to increase awareness of local tastes and preferences, and modify products to increase willingness-to-pay. Geographies that are closest to the home country, along CAGE dimensions most relevant to a particular industry, can minimize the trade-offs between these, as fewer adaptations are required (and can be achieved at lower cost), so that local relevance is maintained along with economies of scale. Arbitrage strategies are used to divide the value chain across geographies, depending on where each creates the the most value (increasing WTP more than cost, or lowering costs more than WTP). Note to my students: in addition to the assigned readings, you can access this book electronically through library course reserves, and I've purchased physical copies that I've also placed on reserve for checkout.