Founded over 50 years ago, Aristocrat is the leading gaming machine manufacturer in Australia, with a richly deserved reputation for its products and services, as well as, market leadership. The company has managed to, profitably, realize its vision as the leading provider of gaming solutions through the application of strategies favoring company growth and development. With its administrative center located in Sydney Australia, the company has subsidiary companies in the USA, New Zealand, Europe, Africa, and Asia (aristocrat.com 1). The company employs over 2000 staff in all of the aforementioned subsidiary companies and aims to become the first-rate supplier of gaming equipment globally. The company produces a variety products and services for the gaming industry ranging from ancillary equipment, electronics, as well as, comprehensive gaming solutions for their clients. The company has succeeded in the introduction of innovative gaming products and services both for the domestic and international markets while maintaining its global competitiveness in the industry. Some of the motivations for the company’s expansion in the global market include economies of scale, the need to increase the company’s market share, and the need for a return on investment. The company ranks second in the international gaming industry and is estimated to have earned a revenue of over A$1 billion in the year 2005 (aristocrat.com 1). At present, the company’s revenues have fallen below A$800 million, with over 55% of this revenue derived from international operations (ceoforum.com 1). The company has successfully linked its managerial competencies on both domestic and global platforms hence ensuring international performance by the company. The company employs international strategies that are flexible and able to influence and persuade business ventures in the global market.
This paper provides an analysis of the international strategies that Aristocrat employs in its business procedures.
Aristocrat’s International strategies
Undertaking an international business venture is a complex process, which necessitates specialized knowledge about the global market. Aristocrat has managed to, objectively, pursue international business opportunities, putting the company at a competitive advantage from its chief competitors. Accordingly, the company has managed to benefit from the application of international strategies such as international business-level strategies, multi-domestic strategies, global strategies and transnational strategies (aristocrat.com 1).
Aristocrat’s business level strategies entail international low cost of production whereby the company focuses its production and manufacturing procedures in Australia. The company then exports these products to international markets, making it possible for customers to access their products internationally. This strategy allows for elevated value-added procedures in the home country and low value-added business ventures in foreign countries (ceoforum.com 1). Besides, owing to the characteristics of the gaming industry, the company also employs international focus strategies adjoining the already existing low cost strategies to, effectively, deal with the diverse, international markets.
In addition to the business level strategies, Aristocrat also utilizes corporate-level international strategies for resource sharing synchronization across all of Aristocrat’s subsidiary companies. Three main corporate-level strategies have been identified including multi-domestic strategies, global strategies, as well as, transnational strategies (ceoforum.com 1). Multi-domestic strategies allow Aristocrat to decentralize functional decisions in each subsidiary company. With this strategy, all the company’s subsidiary companies are independent of each other, making it possible for companies to adapt their products to their local markets. This is especially evident in the company’s management approach, which necessitates accountability and responsibility by each subsidiary company.
Previously, the company tolerated global responsibility that censured regional responsibility averting company growth in certain regions. Aristocrat recognizes that the international market provides a broad variety of cultures and markets and uses this strategy to ensure that their products and services are accepted globally. Distinctively, the company also standardizes its products across national markets, which, in turn, lays emphasis on economies of scale (ceoforum.com 1). This strategy is referred to as the global strategy and is used contrastingly, yet inter-reliantly, with multi-domestic strategies. Here, the company centralizes all the business-level strategies to the home office in Australia, which requires coordinating business operations across borders. This strategy promotes the production of high-quality products and services for all clients irrespective of their countries of residence, which, in turn encourages brand recognition internationally. For example, the company offers all its clients with similar games and gaming operations such as Queen of the Nile, which is the company’s most refutable game to date (aristocrat.com 1).
Irrefutably, Aristocrat also exploits transnational strategies for the achievement of global efficiency and local responsiveness (aristocrat.com 1). This strategy requires simultaneous operations on local and international levels, hence centralized control, and coordination. Additionally, the company also pursues organizational learning to achieve competitive advantage during their international business ventures.
The gaming industry in Australia has recently experienced a reduction in revenue for the last five years. This comes as a result of government regulations that have constricted the production and manufacture of gaming machines by companies. However, Aristocrat has managed to circumvent this reduction in revenue through the application of international strategies, which promote the company’s growth and development internationally. These strategies have not only helped improve the company’s revenue margins, they also facilitate better customer support that is vital for international business ventures.
“Aristocrat.” aristocrat.com. Aristocrat, n.d. Web. 15 August, 2011.
“Going global from Australia: Aristocrat’s Des Randall on the challenge.” ceoforum.com.
CeoForumGroup, n.d. Web. 15 August, 2011.