AAA Framework For Global Expansion: Coca Cola, PepsiCo, And Qantas Airlines Industry

AAA framework Beverage Industry

Everything today is available and accessible on a global platform. Every business wants to have its hands on, on the international face and have its presence globally. There is an expansion of some kind or the other taking place at every organization big or small. For the expansion of business at a global level, many strategies or laws or foundation or procedures are described and stated for the smooth expansion of business. The experts conducted studies and understood the global cultures and the desires of the people and markets at every level and then laid some foundations that are used by organizations for expansion and presence in the global market. AAA (Adaptation, Aggregation, and Arbitrage) framework is also one such model described for the organizations to be followed by big giants for their successful establishment globally. This framework focuses on helping the organizations to decide on adapting the appropriate strategy for their international expansion with an impact of creating value.

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Coca cola is considered as the global and tends to see the markets of the entire globe as the single market. The company sells the similar product around the globe. The company major strategy is related to the product diversification and the adaptation encompass to its customers in the 200 countries where there is the presence of the company (Gertner and Rifkin, 2017). The adaptation framework of the Coca cola includes the description of the products and the ingredients, advertising campaigns and also includes the products packing line. Company for its adaptation in the foreign markets has introduced the different varieties products in the similar category of the products and services and hence covers the wide range of the products in the similar category (Gertner and Rifkin, 2017). For the adaptation in the globally market, the company has the strategy to act locally.

The company has adapted the strategy of personalization and offering in the each and every country is customized by the local language and culture, in this the famous names of the regions are printed on the bottles or the cans in the companies moniker place (Wang, 2015).

Coca cola is one of the largest companies having its presence globally. The success of the company in the global markets is the result of its emphasis on the brand of the product. The company believes not only it sells the drinks in the bottles but the happiness to the individuals in the bottles (Rensing, Karsten and Stiller, 2002). For this, the company unveiled the new campaign of packing where the individualized around 2 million bottles were designed. The company strives for its expansion beyond the regional focus in the United States and the ultimate goal is to achieve the scale of the universal economies. The legal presence of the company in the Market of Burma bring the tax revenue for the government and is seen as the symbol of the political and the economic reforms in the global markets (Rensing, Karsten and Stiller, 2002). The Aggregate framework provides the company to match the fluctuating demands of the brand in the specific plant, inventory and the labour capacity.

Aggregation

The company is exploring the new places through the supply chain. Company for the performance enhancement of the products added something new to it adding the consumer values (Rensing, Karsten and Stiller, 2002). The strong branding with the quality of the products and the cross cultural management added its strong presence and the performance enhancement in the foreign markets.

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The company Pepsico through the global strategies to establish its strong presence in the global markets and becomes the local company with the adaptation of the cultural and the local values of the nation where it is making its expansion. The company adapted the methods and cater the products in the markets as per the preference and the taste of the local customers. For example in the market of the China Company has launched the potato chip product in cucumber flavour as per the consumer preference which is not available in the other countries around the globe (Nispen, 2014). PepsiCo for establishing its presence in the foreign markets is to be creative and innovative in its products and shall try to satisfy the needs or the requirements of the local consumers. PepsiCo adapted the strategy of the product development while entering the new markets and introduced or offers the new products for capturing the larger number of consumers in the market. For this PepsiCo introduced the products which are the low calorie, low saturated fat, reduced salt food and beverage products (Nispen, 2014). 

Aggregation theory of PepsiCo is related to the standardization.  Through such strategy PepsiCo market the product in the new market through the advertisement companies. The company vision is to deliver the highest financial performance with the long term integrating sustainability in the strategies of the business (Rensing, Karsten and Stiller, 2002). This helps the company to leave its positive imprint on the environment and the society. The company under the aggregation has set the strategic key goals around the key areas such as the environment, products and the consumers for bringing vision in the lives. 

Arbitrage framework in PepsiCo is a way of exploiting the differences among different locations. It is establishing itself in a market with low manufacturing cost because of low raw material price and selling the end product at a higher price to another (Husted, 2013). Outsourcing, as well as offshoring, is the trending examples of arbitrage. We have cultural (favourable conditions associated with the region), administrative (legal differences creating opportunities), geographical (leveraging geographical differences), economic (value adding strategies/ exploiting differences in labour cost). PepsiCo offers the low prices that are based on the low operating costs. Company minimizes the cost and the prices of the products for attracting the consumer in spite of the saturation in the market.

Arbitrage

Referring to adaptation, Qantas Airline industry has successfully been able to adapt to the low cost standards in the industry. Qantas airlines have successfully adopted the standard working procedure for their workforce. This has helped in competing with the lower costs in the industry (Charoenset and Wu, 2014). Jobs are redefined and customers enjoy lower costs of travelling and the offers given from a promotional standpoint. Qantas, the standards definer of the airline industry in terms of wages, working environments, and conditions, no longer did so (Sarina and Wright, 2015). It also adopted the strategy of the market to attract customers. Qantas now had flexible and standard working practices followed along with flexible terms and conditions to work. The airline industry makes the required changes based on the external and internal factors, in such a manner that it can make big profits with less investment (Dodds and Hunt, 2012). The Airlines provided the local food supply, according to the region, to its travellers to avoid complaints regarding the stale food. They also started serving packed food from a hygiene standpoint. The airline provides halts to long distance travellers, firstly, to relax, secondly making them aware of the local market and promote business (Sarina and Wright, 2015).

Qantas has its significant impact on the economy of Australia. It advertises the tourism industry internationally as well as to its domestic footfall. It supports 1 in eight jobs funded by the people flying Qantas. In addition to this, it takes care of tourists’ travel from, to and around Australia. Qantas is the face of Australian tourism. (Gillen and Gados, 2008) It contributes 10.4 million dollars to the Australian economy along with the Jet star. The impact is calculated in GDP, which builds the sector’s production by the returns addition to capital.

Qantas aims at delivering stable returns to its share holders. Due to the Global Financial crises in 2008, Qantas had to outsource 7000 jobs for reducing the cost by offshore engineering and third party maintenance, helping Qantas to sustain the tag of Qantas being the safest airlines to travel (Sarina and Wright, 2015). In airlines, Qantas uses NPS to know the customer feedback, which is forwarded to the front line managers to make improvements in the services and used for strategic decision making from business standpoint, improving travel experiences of customers (Gillen and Gados, 2008)

Thai Airways had been out of business for quite some time for it was restructuring the working pattern and methodology to be adopted to mark its presence again. Adapting new things, technology and few external factors helped the airlines to gain back its stock market presence and price. It replaced its aging jets with newly designed planes that provide fuel efficiency helping the airlines to save on the oil cost (Charoensettasilp and Wu, 2013). It would buy new planes that would cater to the growing guest list as the airlines would also introduce new air routes to new destinations to travel.

PepsiCo

Thai Airways launched Airline Lounge Spa, awarded as best airline Lounge Spa by Skytrax 2016 (Lin, 2012). This Spa helps them introduce their traditional massage to the world through its service users. Being a National airline, Thai airways always works towards building the better society and environment. At every point, the employees exhibit the tradition of serving guests with best, so that, they get off the flight with a smile.

The preferred services delivered are a part of Aggregation from airlines standpoint, Thai Airways has the new technology in place, by which, airlines would be able to compete on the real-time basis with the wages if the tickets offered by other airlines and within hours offer the changed price of tickets to customers. The dynamic allocation of seats, selection of flights available and services delivered.

Every airline has a set of rules and regulations to be followed. Thai airways offer in-flight wireless Wi-Fi. Business owners can stay connected to exchange important e-mails in the flight so that it can keep them updated. As a common man, one can share memorable moments of your journey with your loved ones. Thai Airlines offer this service on flights of Airbus A330-300 and A380-800 (Meyer and Estrin, 2014). The service fee is payable by either credit card or debit card. It offers in-flight grooming for men by giving them facial foam, moisturizer, face mask and also lotion for hands and face. Introducing these services might increase the expense incurred by the traveller but would give him the better experience of travelling with Thai airways.

An arbitrary aspect of Thai Airways offers the permanent staff hired by Thai airways at its different destinations. They even hire locals to deliver things as per airline standards by being in a service contract with them (Charoenset and Wu, 2014). They maintain their service standards despite destinations, be it on ground, on a flight or after flight for carrying over. The technology keeps the services connected so that at no place the customers or employees are without the required information. Thai faced few ups and downs as reflected in their first quarter report of 2017. So, they have a few action plans like dismissing operations at the Don Muang International Airport and just operate from Suvarnabhumi, the only home-base airport, which would reduce the operational cost of airlines. Thai Airlines has also signed 2 MOU with Royal Thai Navy for the development of an aircraft maintenance centre in the first phase and air cargo and logistics centre in second.

Airlines Industry

Conclusion

Hence, to conclude the companies through the AAA framework develops the new strategies and is successful in the global market as a result of its innovations in the products as the consumer demand in the desired market, making and  building  the human connections, creating the branded experiences and staying true towards the simple principle so the company and the market segment. Through the process of the AAA framework, the company fits into the desired market segment and thus occupies its place in the market. In a similar way

The discussed companies focused on the AAA strategies and focused on making the profits in various ways through such strategies. The focus is on the consumer needs and providing the customized products with introduction of the new products in the global market as per the consumer requirement. The company’s focus is also to scale the economies with the entrance in the market of the world and to respond to the changes positively and effectively.

References

Charoenset, S. and Wu, C. (2014). Thai Consumer’s Expectations and Satisfaction of Services Obtained from Domestic Low-cost Airlines. Journal of Applied Sciences, 14(1), pp.1-9.

Charoensettasilp, S. and Wu, C. (2013). Attitude and Needs of Thai People in Selecting Domestic Low-Cost Airlines. American Journal of Industrial and Business Management, 03(02), pp.178-184.

Dodds, W. and Hunt, K. (2012). Legend Airlines: American Airlines Worst Nightmare?. Journal of Business Case Studies (JBCS), 8(2), p.135.

Gertner, D. and Rifkin, L. (2017). Coca-Cola and the Fight against the Global Obesity Epidemic. Thunderbird International Business Review.

Gillen, D. and Gados, A. (2008). Airlines within airlines: Assessing the vulnerabilities of mixing business models. Research in Transportation Economics, 24(1), pp.25-35.

Husted, B. (2013). Global Environmental and Social Strategy. Global Strategy Journal, 3(2), pp.195-197.

Lin, M. (2012). Airlines-within-airlines strategies and existence of low-cost carriers. Transportation Research Part E: Logistics and Transportation Review, 48(3), pp.637-651.

Meyer, K. and Estrin, S. (2014). Local Context and Global Strategy: Extending the Integration Responsiveness Framework to Subsidiary Strategy. Global Strategy Journal, 4(1), pp.1-19.

Nispen, P. (2014). The Framework of Culture: a Frame for Work. Journal of Intercultural Management, 6(3).

Rensing, C., Karsten, M. and Stiller, B. (2002). AAA: a survey and a policy-based architecture and framework. IEEE Network, 16(6), pp.22-27.

Sarina, T. and Wright, C. (2015). Mutual gains or mutual losses? Organisational fragmentation and employment relations outcomes at Qantas Group. Journal of Industrial Relations, 57(5), pp.686-706.

Wang, M. (2015). Brief Analysis of Sports Marketing Strategy Adopted by Coca Cola Company. Asian Social Science, 11(23).