Difference between revisions of "AFI Strategy Framework"
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== What is AFI Strategy Framework?<ref>[https://quizlet.com/43586132/strategic-management-chapter-1-flash-cards/ Defining AFI Strategy Framework]</ref> == | == What is AFI Strategy Framework?<ref>[https://quizlet.com/43586132/strategic-management-chapter-1-flash-cards/ Defining AFI Strategy Framework]</ref> == | ||
| − | '''AFI Strategy Framework''' is a model that links three interdependent strategic management tasks that together help firms conceive of and implement a strategy that can improve performance and result in competitive advantage. The following are the 3 Tasks of the AFI Strategy Framework | + | '''AFI Strategy Framework''' is a model that links three interdependent [[Strategic Management|strategic management]] tasks that together help firms conceive of and implement a strategy that can improve performance and result in [[Competitive Advantage|competitive advantage]]. The following are the 3 Tasks of the AFI Strategy Framework |
*Analyze: The Strategic Management Process, External Analysis, Internal Analysis, and Firm Performance. | *Analyze: The Strategic Management Process, External Analysis, Internal Analysis, and Firm Performance. | ||
*Formulate: Business Strategy, Corporate Strategy, and Global Strategy. | *Formulate: Business Strategy, Corporate Strategy, and Global Strategy. | ||
| Line 16: | Line 16: | ||
*Analysis | *Analysis | ||
**Perform an external environmental analysis of the: | **Perform an external environmental analysis of the: | ||
| − | ***Macrolevel environment (PESTEL) | + | ***Macrolevel environment ([[PESTEL Analysis|PESTEL]]) |
***Industry environment (Porter’s five forces) | ***Industry environment (Porter’s five forces) | ||
***Competitive environment | ***Competitive environment | ||
| Line 28: | Line 28: | ||
*Formulation: Provide analysis of the firm’s business-level strategy and corporate-level strategy: | *Formulation: Provide analysis of the firm’s business-level strategy and corporate-level strategy: | ||
| − | **Business Strategy | + | **[[Business Strategy]] |
***Differentiation, cost leadership, integration | ***Differentiation, cost leadership, integration | ||
***Innovation and strategic entrepreneurship | ***Innovation and strategic entrepreneurship | ||
| − | **Corporate | + | **[[Corporate Strategy]] |
***Vertical integration and diversification | ***Vertical integration and diversification | ||
***Potential acquisitions, alliances, networks | ***Potential acquisitions, alliances, networks | ||
| Line 42: | Line 42: | ||
***Control and reward systems | ***Control and reward systems | ||
***Strategy/structure relationship | ***Strategy/structure relationship | ||
| − | **Corporate | + | **[[Corporate Governance]] and [[Business Ethics]] |
***Agency theory | ***Agency theory | ||
***Shared value | ***Shared value | ||
| Line 48: | Line 48: | ||
== See Also == | == See Also == | ||
| − | [[ | + | #[[SWOT Analysis]] |
| + | #[[Five Forces Model|Porter's Five Forces Model]] | ||
| + | #[[Balanced Scorecard]] | ||
| + | #[[Value Chain Analysis]] | ||
| + | #[[Blue Ocean Strategy]] | ||
| + | #[[Strategic Leadership]] | ||
Latest revision as of 11:00, 23 August 2023
What is AFI Strategy Framework?[1]
AFI Strategy Framework is a model that links three interdependent strategic management tasks that together help firms conceive of and implement a strategy that can improve performance and result in competitive advantage. The following are the 3 Tasks of the AFI Strategy Framework
- Analyze: The Strategic Management Process, External Analysis, Internal Analysis, and Firm Performance.
- Formulate: Business Strategy, Corporate Strategy, and Global Strategy.
- Implement: Organization Design, Corporate Governance, Business Ethics, and Strategic Leadership.
Diagrammatic Illustration of AFI Strategy Framework
source: Joe Mahoney
Practical Application of AFI Strategy Framework[2]
In strategic management, one often takes the perspective of the CEO or person responsible for the strategy of the organization. One would normally use an inductive approach to the analysis. The following is a helpful overview of the AFI Strategy — analysis, formulation, and implementation and its practical application.
- Analysis
- Perform an external environmental analysis of the:
- Macrolevel environment (PESTEL)
- Industry environment (Porter’s five forces)
- Competitive environment
- Perform an internal analysis of the firm using RBV/RBT:
- Identify resources, capabilities, and competencies (VRIO analysis)
- Identify value chain primary and support activities
- Analyze competitive advantage and firm performance:
- Use financial and market-based measures
- Comparison of the firm to competitors, peers, industry average
- Assessment of achieving and sustaining competitive advantage
- Perform an external environmental analysis of the:
- Formulation: Provide analysis of the firm’s business-level strategy and corporate-level strategy:
- Business Strategy
- Differentiation, cost leadership, integration
- Innovation and strategic entrepreneurship
- Corporate Strategy
- Vertical integration and diversification
- Potential acquisitions, alliances, networks
- International strategy
- Competing around the world
- Business Strategy
- Implementation: Explain how to put the strategy into action and align the strategy/structure relationship:
- Organizational design, structure, culture, control
- Functional, multidivisional, matrix structure
- Control and reward systems
- Strategy/structure relationship
- Corporate Governance and Business Ethics
- Agency theory
- Shared value
- Organizational design, structure, culture, control
See Also
- SWOT Analysis
- Porter's Five Forces Model
- Balanced Scorecard
- Value Chain Analysis
- Blue Ocean Strategy
- Strategic Leadership
References