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    Strategic Management and Examples

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    1) What is the AFI strategy framework? 

    2) What is the relationship between firm effects and industry effects? 

    3) Differentiate between a firm's intended, realized, and emergent strategies. 

    4) What are customer-oriented vision statements? Explain with the help of an example. 

    5) What are network effects? 

    6) How do economies of scale and high switching costs act as entry barriers in an industry?  

    7) Briefly describe the VRIO framework. 

    8) What are the drawbacks of using total return to shareholders and firm market capitalization to measure firm performance? 

    9) Briefly explain the difficulties in pursuing an integration strategy. 

    10) Discuss the pricing options available to a firm pursuing a cost-leadership strategy. 

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    Strategic Management
    1. AFI framework analysis is a strategic planning tool that links three stages of planning- analysis, formulating and implementation. This strategic approach is used by organizations to gain and sustain competitive advantage. The benefit of this approach is that it separates initial analysis from external analysis. The internal analysis is carried out as the first step followed by external and internal analysis, business strategy formulation and implementation. However the framework lacks monitoring as process flows only in one direction, i.e. when strategy is formulated it is implemented. In real life companies go back to reassess their strategy based on changes in the environment.

    2. Industry effects are characteristics common to an industry like concentration, intensity of advertising, and product differentiation. These common characteristics influence the performance outcomes across firms operating in different industries (Ngobo, n.d). These reflect similarity in firms' responses to market conditions.
    Firm effects are characteristics which are unique to the firm, like brand equity, differences in market share, human resources, managerial competence and which are responsible for variation in performance outcomes across firms within an industry. An example of firm effects is Walmart. Walmart has been able to provide products at lowest prices to its customers because of firm-specific factors.
    Firm effects reflect variations in resources and capabilities of companies because of which they are able to create a distinct position in the industry.
    3. Intended strategies: are those strategies which organization plans to pursue in future. Intended strategies emerge from organization's strategic plan.
    Emergent strategies: these are strategies which are not planned but are a result of opportunities and challenges in the environment. However it is not always true that emergent strategies are a success. For example, FedEx had intended strategy of package delivery which it changed to focus on emerging technology of fax. However there were many technical problems in this new technology and could not work for the ...

    Solution Summary

    This solution discusses different concepts related to strategic management and explains them with examples.