Whether the organization is in the public or private sector or at an entrepreneurial or later stage of development, strategy addresses how it will engage its environment. This involves an integrated set of choices that are guided by the firm's mission and objectives. Either implicitly or explicitly these choices involve (1) who are chosen as target customers, (2) what products and services are offered, (3) how the products and services are best delivered to these customers, and (4) how they will be differentiated from competitors.

A good strategy is one where the four choices fit together and exploit the environment in which the firm operates. Thus, they reflect the economic logic of the company and are the fulcrum for profit creation.

The stakeholders who really matter to the company will determine the distribution of these profits. Strategy is then implemented by different organizational arrangements.