I have been living with this subject for the last 6 months.  I have become a fan of Michael Porter and am just beginning to understand how important strategy is to sustainable competitive advantage.  At the end of the day, there are only so many organizational efficiency changes you can implement.  Without a clear strategy, you will lose profitability and risk total failure over time.  This HBR post is very helpful on this critical subject:

“What is your strategy? Most senior executives can confidently answer this question. How has that strategy changed over time? This one usually gets a quick answer too. How do you make decisions about changing that strategy? Now it gets much more difficult. The fact is, many senior executives struggle to describe how they make strategic decisions. That’s a serious problem, since the process for making strategic decisions can shape the strategy itself. Making a strategy without knowing your process is like sailing without a compass.”

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