Using the data provided for 3 fictitious companies (Company 1, Company 2, Company 3), calculate the 3 required ratios. Remember, because we are buying our product from the Production company, Cost of Goods Sold is a good analogy for "Labor". Plot the ratio values on the appropriate scale and draw the AAA strategy triangle for each of the companies. Using the plotted data identify the best international strategy (Adaptation, Aggregation or Arbitrage) for each of the companies.

AAA Strategy Exercise Adaptation Advertising-to-Sales 10% Aggregation R&D-to-Sales 10% 8% Company 1 plot with X Company 2 plot with Company 3 plot with * Median 80% ------ 90th Percentile 100% Arbitrage Labor-to-Sales Company Data Sales COGS Advertising Company 1 $1,695,000 $ 768,000 $ 114,000 $ 21,000 Company 2 $2,334,000 $1,045,000 $ 121,000 $ 163,000 Company 3 $2,118,000 $1,022,000 $ 84,000 $ 23,000 R & D Labor-to-Sales Advert-to-Sales R&D-to-Sales Selected Strategy Financial data shown in thousands of dollars (000's) AAA Strategy Exercise Adaptation Advertising-to-Sales 10% Aggregation R&D-to-Sales 10% 8% Company 1 plot with X Company 2 plot with Company 3 plot with * Median 80% ------ 90th Percentile 100% Arbitrage Labor-to-Sales Company Data Sales COGS Advertising Company 1 $1,695,000 $ 768,000 $ 114,000 $ 21,000 Company 2 $2,334,000 $1,045,000 $ 121,000 $ 163,000 Company 3 $2,118,000 $1,022,000 $ 84,000 $ 23,000 R & D Labor-to-Sales Advert-to-Sales R&D-to-Sales Selected Strategy Financial data shown in thousands of dollars (000's)