Aims to provide an overview of major work that has been carried out in the area of strategy development in the past and outlines how it will develop in the future. Presents an analysis of the term “strategy”. Discusses the evolution of different conceptual frameworks over time together with their impact on today′s understanding of strategy formulation and implementation. Concludes by presenting the requirements for a dynamic approach to strategy development together with the way in which it can be realized.

Successful organizations manage to change their strategy constantly in line with the changes in their competitive environment by using a dynamic approach to strategy formulation and implementation. Demonstrates the way in which such an approach can be developed, using the experiences of Hewlett‐Packard.

Although the notion of competitiveness lies at the heart of business strategy development, its definition is often vague and does not lend itself to a measurement process. The competitiveness of an organization depends on a number of factors which are interrelated and cannot be looked at in isolation. The main factors include: customer values, shareholder values and ability to act and react within a competitive environment. Proposes a holistic approach for defining competitiveness together with a mapping process which encompasses different dimensions of competitiveness. The mapping process enables the measurement of competitiveness while highlighting the strengths, weaknesses, opportunities and threats within a competitive environment which form the basis of business strategy formulation.

Performance measures form an important feedback‐loop in strategic change which represents a process of constant learning. However, complete learning can only be achieved if a performance measurement system takes into account different value systems that exist within an organization and adapts dynamically to changes in the competitive environment. First establishes the role that performance measures play in the process of strategic change. An approach for the design of performance measurement systems for use in strategy evaluation and implementation is then presented. Finally, demonstrates the ways in which a performance measurement system can be made flexible to account for changing conditions.

Strategy formulation can no longer be based on a process of conception, as the underlying conditions change before a formulated strategy can be implemented. It should be based on a continuous learning process which involves, inter alia, learning about the organization’s goals, the effect of different actions towards these goals and the way in which these actions should be implemented. First, highlights the importance of an organization’s knowledge base by demonstrating the relationship that exists between strategy formulation and organization learning. Then presents the role of performance measurement systems in stimulating cognitive and behavioural learning. Places the concept of organization learning in a strategy formulation context in order to show the effect of the nature and speed of environmental changes on the organization’s learning processes.