AAA Strategy Map

Describe your international operation lever by lever (adapting to local differences, aggregating for scale, arbitraging differences for gain), score it from what you do today, and decide which single rebalancing is worth making. An optional section scores ten factors to test which lead strategy fits your industry, capabilities and market.

Practice, not research. Ghemawat's AAA framework (2007) is consulting practice without independent testing. The advice to focus on one or two levers is a discipline, not a proven law. Score bands are a rule of thumb.

Use it when:

• You operate in two or more countries and keep arguing about "standardize or localize".
• You want to see whether your espoused international strategy matches what your operation actually does.
• You are planning an expansion and need to choose how much to adapt, share and exploit.
• Use the optional AAA Fit Test section when you want to check whether a chosen AAA mix fits a specific market and whether you can execute it.

Skip it when:

• You still need to know which of your advantages will travel: use 7.16 FSA Exportability Check.
• You want to test how well a chosen AAA mix fits a specific market: use the optional AAA Fit Test section below.

Ghemawat's (2007) AAA framework organizes international strategy into three levers: adapting to differences, aggregating across them for scale, and arbitraging them for gain. It is consulting practice, not tested science. Its sharpest claim, that firms usually have to focus on one or two of the three, resembles Porter's (1980) generic strategies and the warning against being stuck in the middle. That parallel is weak or contested as research: the strategy types do distinguish designs, but the claim that mixing them damages performance has not found support.

So hold the framework this way: the three levers are a useful vocabulary for seeing what your operation actually does, and focus is a discipline worth taking seriously, not a law of nature.

The page follows that reading. You describe current operations, not ambitions, because most firms find that their stated strategy and their scores disagree. "Balanced" (chosen trade-offs) and "unfocused" (no strong lever) are separate outcomes on purpose. And you must name what a shift gives up, because an unnamed trade-off is how strategies drift.

Your firm or unit:

Current footprint (countries, main activities per country):

Target expansion or decision at hand:

Illustrative example: the company and all scores are made up.

A Swedish maker of outdoor workwear sells in the Nordics, Germany and Poland. It designs in Sweden, sews in Poland and runs one warehouse in Denmark.

Profile: aggregation-focused with a deliberate arbitrage element. Evidence it works: shorter lead times from the shared warehouse. Evidence it does not: a high return rate for fit in Germany. Trade-off: scale and cost for local fit.

Shift: more adaptation for Germany only, a revised size range and fit, while keeping the shared design platform and warehouse. Gives up: design time and a slightly bigger range. First actions: test the new fit with ten German customers and decide by the end of the quarter.