An objective analysis and understanding of your markets and your costs and capabilities forms the bedrock for the strategy development process. From this analysis and by applying creativity will come a number of options and opportunities that can be used to build and implement a solid strategic plan for new or existing markets.

Setting a strategy requires knowledge in three areas:

• Customers - Existing customers and potential customers and markets. What do they do? What would help them do what they do better? What are their needs? Where are the most profitable customers?
• Competencies  - Skills, knowledge and relationships. What do you do well?  What abilities could you draw on? What costs do you have to carry? Where do you make money?
• Competition - An important part of strategic analysis is knowing what your competitors are doing. What is the basis of competition? Where are the threats? Where is their pressure and where is the market easy? Microsoft will be as keen to know what Apple are doing as Apple will be to know what Microsoft are doing.