Managerial Decisions in AFI Framework Analysis for Competitive Advantage

To determine the manager’s decisions about building competitive advantage in the analysis stage of the AFI Framework, you have to look at the internal and external information. The customers and local communities can offer feedback on how they perceive Target as a consumer that will allow the manager to get a better understanding on Target’s target market and what tools will be the most successful to use such as a way to market to them. For example; using social media, commercials on television, advertisements on the internet, weekly catalogs, or even billboards.

Target can gather information from its stakeholders to inspire a better customer service experience in the formulation stage by conducting different types of surveys with incentives such as an online survey or while shopping/checking out at Target.

You can also encourage consumers to leave reviews that are negative or positive on the website about their buying experience and/or the product that they purchased and Target can also gather information from its employees since they have a role in providing that better customer experience in order to differentiate Target.

When all of this information is gathered, it helps Target better understand what their consumers want and need which then can lead to lower costs in many different departments since Target will be able to know exactly what they need to do to ensure a better customer experience. Stakeholders can affect the implementation stage in good and bad ways. Some positive ways that they can affect this stage is by bringing in more business, if there are more customers buying products then Target will be able to lower prices which will equate to customer satisfaction.

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If Target is seeing an increase in business and they are doing better than before, they will be able to reward their employees with a possible pay increase. The opposite would be the negative ways that can affect the implementation stage. This could be seeing less business, which then Target would need to increase their prices and that may lead to their customers going to competitors. If the business is not doing well, employees could see a decrease in pay or even layoffs and if negative implementations keep occurring, it could lead to even store closures. Firm effects are more important than industry effects because managers’ actions are more important when determining the performance of the firm than the external elements of the environment. A situation that this may not be true is the real estate industry. In the real estate industry, industry effects could be more important than firm effects because the external environment can have a more drastic effect on the industry, such as the economy which would affect the consumers, which then would affect the housing market.

An industry with a clear leader is electric vehicles. Tesla founded by Elon Musk is the clear leader of this industry. A competitor of Tesla would be Toyota and the Prius electric car. Tesla decided to produce an expensive electric car no matter what it looked like. Tesla was the first to deliver an electric luxury sports car. Toyota wanted to create an affordable, average-looking electric car. Tesla had specific strategies such as direct sales, they do not sell their vehicles in car dealerships. They provide service centers with their sales centers which they believe will correspond with increased customer demand. Tesla also has a supercharger network where drivers can fully charge their vehicles in about 30 minutes for free, which they believe is helpful for the mass adoption of Tesla and electric cars as a whole. Toyota only offers electric cars in specific countries depending on consumer preference and demand. One of Toyota’s strategies is to keep improving the same car instead of trying to create new styles, they want to perfect the one that they have out on the market already. Tesla took a huge risk from the beginning with much confidence and succeeded, Toyota seems to be playing it safe and is succeeding as well but does have more room for more success.

A company that is acting in the interests of broader stakeholders is State Farm. They have produced a stronger competitive advantage because they do think about their stakeholders. For example, they came out with a new commercial around the holidays for the purpose of reminding the viewers that volunteerism and charity is important and should not only happen during the holiday season. They also created a new tagline that was made with an effective and uplifting campaign that focuses on ‘when things go brilliantly’. They came up with telling their consumers that their State Farm agents are there to help life go right. This helps consumers see insurance in a more positive way.