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Strategy forms a link between the firm and its external environment. To design and evaluate business strategies different approaches can be used one of such is the SWOT frame work: Strength, weaknesses, opportunities and threats; it differentiates between internal and external environment. The features of the internal environment are strengths and weaknesses while two features of the external environment are opportunities and threats, but it is a handicapped framework because it fails to distinguish strengths from weakness and opportunities from threat.

A strategy must be consistent with the firm’s goal and values, with its organisation and systems. Lack of consistency between the strategy pursued by a firm and its external and internal environment is a common source of failure.

Business strategies are needed to give direction and purpose, to employ resources in the most effective manner and to co-ordinate decisions made by different members of the organisation.

Its origin h...