Every year in Britain thousands of new businesses are created. A few will grow to become global companies employing thousands of people, others will never make the world stage; in fact, the majority will cease trading within two or three years.

To survive, managers need a good understanding of the business environment, the opportunities and threats it offers, a realistic appreciation of the abilities and limitations of the business, knowledge of what they want to achieve, and a fairly clear idea of the direction in which the business should go. The route the business takes to achieve its objectives is often known as the corporate or business strategy. In this unit, we look at some of the tools that we can use to decide on the strategy. As you will see, the tools we describe are those which link the various functions of the business and are to do with operating the business as a complete organisation rather than as a collection of functions or departments. The business strategy concerns the overall direction of the organisation. Here, we consider the operational or functional strategies that contribute to the business strategy.