Why is Strategy and Why Is It Important?

Managers face three central questions in evaluating their company's business prospects:
1. What's the company's present situation?
2. Where does the company need to go from here?
3. How should it get there?

The question "What's the company's present situation?" prompts managers to evaluate industry conditions and the competitive pressures, the company's current performance and the market standing, its resource strengths and capabilities, and its competitive weaknesses.

The  questions "Where does the company need to go from here? pushes managers to make choices about the direction in which the company is headed - what new or different customer groups and customer needs it should endeavor to satisfy and how it should change its business makeup.

The question "How should it get there? challenges managers to craft and execute a strategy - a full-blown action plan - capable of moving the company in the intended direction, growing its business, strengthening its ability to compete, and its improving its financial performance.