There are four basic reasons why you set strategy for your business:
1. To increase your return on equity. It is to earn more money on the equity, or the amount of money that you have invested in your business. Equity represents ownership. It is different from return on investment (ROI) in that it represents out-of-pocket funds. The first goal of strategy, then, is to increase the amount of money you are earning on the resources that you and others have personally invested in the enterprise.
2. To reposition your company. You may find that your company and your products or services are under assault from your competitors. You may find, as Apple did, that you have to reposition your company with new products and new services in new markets with new technologies.
3. To maximize your strengths and your opportunities. Look at what it is that you do extremely well, and what your key opportunities are in the marketplace, and then move rapidly to take advantage of them.
4. To form a basis for making action decisions now. The whole purpose of strategy is to plan and prepare to take actions that are different from what you might have done in the absence of your new strategy