Strategy is the long-term direction of an organisation, the scope of organisation"s activities, gaining advantage over competitors, addressing changes in the business environment, building on resources, capabilities and competencies and values and expectations of stakeholders. *fallacy of detachments - that strategist can be detached from the subjects of their strategies. *fallacy of formalization - that strategy making can be formalised into a systematic rational process. 4 aspects of good mission statements: mission/business definition - what the company does. Is it customer orientated or product orientated: core purpose/vision - the company"s reason for being, values - what standards does the company uphold, future goal. Intrinsically embedded in culture, how employees conduct themselves. Should stretch company to limit but be reachable. The external environment - porter (2008) five forces model. Purpose is to understand the forces that drive profitability, not to determine whether an industry is attractive.