Before an organisation can choose a strategy, it will need: a mission statement—to provide a sense of strategic purpose and value strategic objectives—to provide a sense of direction strategic options a process for selecting the best option. A mission statement defines an organisation's purpose and distinguishes it from other organisations. It identifies the reason for the organisation's existence and can focus the organisation on the business it is, or should be, in.

The primary purpose of a strategy is to provide the organisation with a sustainable position of advantage within a competitive environment. In this topic we will examine the general strategic choices an organisation can make, which is the first stage in defining the strategy it will ultimately follow. We will explore a number of different approaches including: (a) using the organisational purpose, vision and mission to make decisions about strategic choices, (b) focusing directly on achieving a competitive advantage, (c) competing by developing the organisation's core competencies.

Organisational success is largely dependent upon the effectiveness (and efficiency) of the interface between the external and internal environments of an organisation.

Before a strategic position for an organisation can be developed, the following is required:
1. an external analysis that identifies opportunities and threats: the external environment
2. an internal analysis that identifies its strengths and weaknesses: the internal environment
3. a match between internal and external factors
4. strategic options that capitalise on strengths and assist with overcoming weaknesses

The external environment of an organisation is the physical and intangible region from which an organisation's resources are drawn and revenue is generated, and in which competitors battle for both of these. Although the external environment can be defined or categorised in different ways, it is

A recent McKinsey survey of executives (September 2006) on strategic planning, strategy implementation and utilisation identified the following:
- Most companies have a formal strategic planning process, but some don't use it to make their most important decisions
- Fewer than half of respondents were satisfied with their company's approach to making strategic decisions, although senior managers were more satisfied than other levels of management

Strategic management may be defined as:

The process of identifying, choosing and implementing activities that will enhance
the long term performance of an organisation by setting direction, utilising
technology and innovation and by creating ongoing compatibility between the
internal skills, resources and capabilities of an organisation and the changing
external environment within which it operates. (Viljoen & Dann 2003: 5)

Topic 1: An introduction to strategic management
Topic 2: The strategy formulation process
Topic 3: External analysis
Topic 4: Internal analysis
Topic 5: Strategic choice
Topic 6: Strategic directions
Topic 7: Strategy Optimisation