Difference between revisions of "AFI Strategy Framework"
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| − | AFI Strategy Framework is a model that links three interdependent [[Strategic Management|strategic management tasks]] that together help firms conceive of and [[Strategy|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 | + | AFI [[Strategy]] [[Framework]] is a [[model]] that links three interdependent [[Strategic Management|strategic management tasks]] that together help firms conceive of and [[Strategy|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|strategic Management Process]], [[Competitive Analysis|External Analysis]], [[Business Analysis|Internal Analysis]], and Firm Performance. | *Analyze: The [[Strategic Management|strategic Management Process]], [[Competitive Analysis|External Analysis]], [[Business Analysis|Internal Analysis]], and Firm Performance. | ||
*Formulate: [[Business Strategy]], [[Corporate Strategy]], and Global Strategy. | *Formulate: [[Business Strategy]], [[Corporate Strategy]], and Global Strategy. | ||
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| − | '''Practical Application of AFI Strategy Framework'''<ref>The Practical Application of the theory of AFI Strategy [https://fisher.osu.edu/sites/default/files/bellner_mhr_4490_mon_lec_4190_autumn_2017.pdf osu.edu]</ref><br /> | + | '''Practical [[Application]] of AFI Strategy Framework'''<ref>The Practical Application of the theory of AFI Strategy [https://fisher.osu.edu/sites/default/files/bellner_mhr_4490_mon_lec_4190_autumn_2017.pdf osu.edu]</ref><br /> |
| − | In strategic management, one often takes the perspective of the CEO or person responsible for the [[Strategy|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 it's the practical application. | + | In strategic [[management]], one often takes the perspective of the CEO or person responsible for the [[Strategy|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 it's the practical application. |
*Analysis | *Analysis | ||
**Perform an external environmental analysis of the: | **Perform an external environmental analysis of the: | ||
***Macrolevel environment ([[PESTEL Analysis|PESTEL]]) | ***Macrolevel environment ([[PESTEL Analysis|PESTEL]]) | ||
| − | ***Industry environment ([[Five Forces Model|Porter’s five forces]]) | + | ***[[Industry]] environment ([[Five Forces Model|Porter’s five forces]]) |
***Competitive environment | ***Competitive environment | ||
**Perform an internal analysis of the firm using [[Resource-Based View|RBV]]/[[Resource-Based Theory|RBT]]: | **Perform an internal analysis of the firm using [[Resource-Based View|RBV]]/[[Resource-Based Theory|RBT]]: | ||
| Line 22: | Line 22: | ||
***Identify [[Value Chain|value chain]] primary and support activities | ***Identify [[Value Chain|value chain]] primary and support activities | ||
**Analyze competitive advantage and firm performance: | **Analyze competitive advantage and firm performance: | ||
| − | ***Use financial and market-based measures | + | ***Use financial and [[market]]-based measures |
***Comparison of firm to competitors, peers, industry average | ***Comparison of firm to competitors, peers, industry average | ||
***Assessment of achieving and sustaining competitive advantage | ***Assessment of achieving and sustaining competitive advantage | ||
*Formulation: Provide analysis of firm’s [[Business Strategy|business-level strategy]] and [[Corporate Strategy|corporate-level strategy]]: | *Formulation: Provide analysis of firm’s [[Business Strategy|business-level strategy]] and [[Corporate Strategy|corporate-level strategy]]: | ||
| − | **Business strategy | + | **[[Business]] strategy |
***[[Differentiation Strategy|Differentiation]], [[Cost Leadership|cost leadership]], [[Business Integration|integration]] | ***[[Differentiation Strategy|Differentiation]], [[Cost Leadership|cost leadership]], [[Business Integration|integration]] | ||
***[[Innovation]] and strategic entrepreneurship | ***[[Innovation]] and strategic entrepreneurship | ||
| Line 37: | Line 37: | ||
*Implementation: Explain how to put strategy into action and align strategy/ structure relationship: | *Implementation: Explain how to put strategy into action and align strategy/ structure relationship: | ||
| − | **[[Organization Design|Organizational design]], [[Organizational Structure|structure]], [[Organizational Culture|culture]], control | + | **[[Organization Design|Organizational design]], [[Organizational Structure|structure]], [[Organizational Culture|culture]], [[control]] |
***Functional, multidivisional, matrix structure | ***Functional, multidivisional, matrix structure | ||
***Control and reward systems | ***Control and reward systems | ||
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===Further Reading=== | ===Further Reading=== | ||
| − | *Strategic Management & Strategic Planning Process - AFI Strategy Framework [https://www.strategicmanagementinsight.com/topics/strategic-planning-process.html SM Insight] | + | *[[Strategic Management]] & [[Strategic Planning]] [[Process]] - AFI Strategy Framework [https://www.strategicmanagementinsight.com/topics/strategic-planning-process.html SM Insight] |
*Why Do We Need the AFI Strategy Framework? [https://www.youtube.com/watch?v=nXOVGMVNZ7Y Frank Rothaermel] | *Why Do We Need the AFI Strategy Framework? [https://www.youtube.com/watch?v=nXOVGMVNZ7Y Frank Rothaermel] | ||
Revision as of 13:25, 6 February 2021
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.[1]
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 it's the 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 firm to competitors, peers, industry average
- Assessment of achieving and sustaining competitive advantage
- Perform an external environmental analysis of the:
- Formulation: Provide analysis of 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 strategy into action and align strategy/ structure relationship:
- Organizational design, structure, culture, control
- Functional, multidivisional, matrix structure
- Control and reward systems
- Strategy/ structure relationship
- Corporate governance and business ethics
- Organizational design, structure, culture, control
See Also
Business Strategy
Corporate Strategy
Strategic Management of IT
Strategic Management
Organization Design
Strategic Planning
References
Further Reading
- Strategic Management & Strategic Planning Process - AFI Strategy Framework SM Insight
- Why Do We Need the AFI Strategy Framework? Frank Rothaermel