GROUP ASSIGNMENT OF COMPETITIVE STRATGEY Executive summary The challenging global market in today’s business world brings a lot of challenges to all the businesses to compete and secure a firm position in the market. In order to make a place in the customer's mind and to continue making a profit, it is essential for all the businesses to develop a well-defined business strategy which can help them to sustain in the competitive market. This report talks about the different strategies used by the different companies in pharmaceutical and steel industries, under AAA theory, to get the best out of the different opportunities available in the globalized market. Introduction Any globalized strategy is designed with an objective to overcome the gaps and variations present in the global market. This report clearly talks about the theory of AAA (i.e. Adaptation, Arbitration, Aggregation) that is formulated to give voice to the fine distinction between the Adaptation, Aggregation, and Arbitrage. Adaptation is the way to help the businesses when they aim towards increasing their revenues as well as their shares in the market with their expansion. Similarly, aggregation lets the businesses in economies of scale with the growth in their global as well as their regional functioning while remaining responsible towards their local presence (Schweizer 2005). With Arbitrage, the businesses make the best use of currency, price as well as cost and chooses the markets to move to, which will give the best revenue in selling their products. These three strategies are useful in helping the companies combat the variance in the demands in the varied marketplaces. They become more confident in facing the global challenges that come in their way. It also helps the companies find the best suitable markets for them to dominate in. Thus, it can be said that the AAA model is useful for all the companies. However, it is also important to note that for each type of business, the three As will work differently, hence, the companies should decide on whether to apply all the three As together or at a different stage of the implementation process. This report will be focused on two industries, Pharmaceutical Industry and Steel Industry which is growing throughout the world. The two companies that will be under the spotlight are Sun Pharmaceuticals and Pfizer Inc. in the pharmaceuticals and Tata Steel and ArcelorMittal in the steel industries (Hong, Torous and Valkanov 2007). The pharmaceutical and steel industries have made their presence in the global market with their continuous growth. The two industries have very well implemented the AAA model, which has ensured an uninterrupted success for them. Discussion Pankaj Ghemawat has promoted the AAA model in competitive strategy which aims towards the development of a global value for the businesses. The effective use of the three AAAs allows a business to sustain in the competitive market and push themselves up to the top even in the super-saturated market. With the proper implementation of this strategy, the businesses can create a value for their products and increase their market shares as well (Ghemawat 2011). Adaptation strategy in the Pharmaceutical industry The new researches in drugs have made the pharmaceutical industries one of the growing industries in the world. In making any new drug, there is a lot of costs involved. Any company in this industry has to go through the process of the patent, safety check, tests, effectiveness, and advertisement. It has to make sure that it is advertising itself in such a way that it reaches to the right people in the country, as all the drugs are not taken by everybody and also the laws in each country is different for medicines. Sun Pharmaceuticals and Pfizer are the best examples in the pharmaceutical industries. Sun pharmaceuticals made itself gain a high position in this industry by abiding by the laws of the different countries (Elliman and Eatock 2005). Thus, it could easily get into the market by making its drugs as per the law of the country in which it tries to get in. They even made their own chemical formulae and packaging to suit the people of specific countries. This has helped the company in an easy penetration in any new market. It has even been able to challenge patents on many products with high value in the US over the last decade and has been able to produce many cheap drugs which are actually the generic versions of such types of drugs. Pfizer is yet another pharmaceutical company which has implemented many new ways to make its place in the Latin America. It has worked on it's cultural as well as regulatory aspects along with its economic values to keep standing in the pharmaceutical market of the country. The company devoted many resources so as to work with many pharmacists who mainly helps the patients in choosing the right medicines for themselves. It even participated in many community programs to reach to its potential customers (Bühring-Uhle, Kirchhoff and Scherer 2006). Adaptation strategy in the Steel industry The steel industry is one of the most challenging industries which forms the basis of the modern world. All the industries, right from the automobiles industries to the pharmaceutical industries all are some way or the other linked to this industry. Thus, the steel industry in the most demanding and essential industries in the world. Maintaining a high position with a great quality of steel products becomes very essential for the companies dealing in the manufacturing of steel as along with the normal customers big locomotive and shipbuilding companies are also their major customers. Hence, companies like Tata Steel and ArcelorMittal goes through a tough time in keeping themselves on the topmost position. Tata Steel aims at being on the world’s number one position in the steel industry by providing their customers with the best quality steel and steel products. They mostly depend on the macroeconomic cycles while keeping up with the growing needs of their customers. The new innovation and development of the modern world have a lot of impact on this industry (Hong, Torous and Valkanov 2007). Hence, to cope-up with the new changes, the steel industries implements different strategies. Tata Steel has, since ages, been with the customers growing demands and has always fulfilled their requirements with great ease and still fulfills the latest market demand with the implementation of the latest market standards. ArcelorMittal is also with the new demands of the market and provides a unique experience to its customers by providing best quality steel products. Both the companies uses an integrated business model, joint ventures as well as being flexible while implementing the adaptation strategy in order to walk with the growing demand of the business. Aggregation strategy in Pharmaceutical Industry The main method of aggregation used by Sun Pharma is that is an acquisition. It acquired many renowned companies which were its competition the different countries and expanded itself. It has acquired about 19 companies and has thus increased their global presence. When it comes to Pfizer, it designs itself to meet the different regulations in different countries, like that in Europe, after which the companies qualify to sell their product in that country. Aggregation strategy in Steel Industry Tata steel mainly follows the process of acquisitions to expand itself. It has acquired many well-known businesses like NatSteel and Millennium Steel. Along with this, the company earns revenue from its shareholdings where it is listed among the top most companies with well-known shareholders throughout the world. The company uses the best plans to increase its productivity and reduce its costs. With the acquisitions, the company has a very low risk of falling down and increases its demand in the new markets very easily. ArcelorMittal itself was formed as a result of a takeover of Severstal and had become the producer of 10 per cent of the world’s total steel. It mainly gets into joint ventures which expand the reach of the company in different countries and helps them get their names on the top. Thus, many companies seek the products of ArcelorMittal for completion of their project (Ndofor, Sirmon and He 2011). Arbitrage strategy in Pharmaceutical Industry In order to have a lower production cost, most of the research centers of Sun Pharma are in the Asian countries as they are developing countries, and this has allowed the company to reduce the overall price of the product which allows them to provide medicines at a much cheaper rate. They also sell the medicines in the developed countries at a higher rate, which helps them generate more revenue for the business. Pfizer relocates with an aim of cutting taxes. The company took over UK’s pharmaceutical company AstraZeneca. By doing so, the company gained a lot, as all the UK companies do not have to pay any tax on any international earnings. Even the tax rate in the country is very low including that on the patented products. Hence, the company profits more (Elliman and Eatock 2005). Arbitrage strategy in Steel Industry The steel industry relies on those arbitration strategies that prevails in that industry. Thus, the businesses’ success relies on the arbitrage strategies. Thus, Tata Steel would mainly aim at selling its products to its high valued customers at much higher prices through which it can generate more revenue for itself. Tata Steel is a name which most people throughout the world knows (Ghemawat 2015). Hence, it has made many dealings with even the raw material providers so that they do not get into the insufficient supply of steel at any point of time and thus can guarantee high-quality products to its customers. ArcelorMittal is famous for its arbitration with State of Senegal where it entered into a contract with Senegal in which it was supposed to deposit iron ore in Senegal, including a railway line construction. However, the contract got delayed and the company failed to construct the agreed railway line. However, the company became known in the market for many. Synopsis Discussion Elements Steel Industry (Tata Steel, ArcelorMittal) Pharmaceutical Industry (Sun Pharmaceuticals, Pfizer) Adaptation Tata Steel invested in such areas which helped it to regain and achieve the main business competence. ArcelorMittal’s main aim is to offer its clients with the best supply of steel. Sun Pharma mainly aims towards implementing such strategies related to their packaging and offering their drugs to those patients who need them. They are customer-centric and work with keeping in mind the different laws of different countries. Pfizer too sells its products with keeping in mind the different requirement of people in different countries. It even gets involved in the different brand building by involving themselves in the local communities. Aggregation Both the companies work towards exploiting the geographical, economic as well as the administrative aspect. The two companies use the strategy of acquiring those businesses which are proving to be challenging for them. They also make sure to meet the various regulations of each country. Arbitrage The companies utilize the different requirement of the different markets including their economic as well as their governmental perspectives. In many developing countries, they have structured their pricing to meet the growing needs of the customers and have thus reduced them substantially. They have a different pricing structure for different countries (Ghemawat 2013). Conclusion This report analyses the AAA model in the context of Pharmaceutical Industry and Steel Industry. The above analysis clearly explains the importance of the AAA in these businesses. The companies should use these strategies in a balanced way as it is mainly about managing the business in a global market. Every industry is globalizing and is using the latest technology and the much-relaxed policies of trading to expand and benefit from the global world (Christensen, Grossman Hwang 2009). This report spoke about the four companies which are enabling themselves to continue their position in the new market by adapting the needs based on the Adaptation, Aggregation, and Arbitrage aspects. Thus, it may be deduced that the two industries consider consolidating their respective stake as well as position while walking towards their profit, development, and success. References Bühring-Uhle, C., Kirchhoff, L. and Scherer, G., 2006. Arbitration and mediation in international business. 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