5.1 Introduction

The last three chapters have dealt with assessing organizational performance, external analysis of the industry, and competitive environments of a firm, and analyzing the internal environment of an organization. What happens to all information that is obtained as a result of all these evaluations? The SWOT framework helps to pull the most important information into a format that can then be used in strategic management to determine the strategic issue the firm needs to address and resolve by consolidating a summary of the other analyses into one framework. The SWOT framework is also helpful in the next phase of strategic management, setting strategies.

A strategic issue is the primary matter faced by an organization that must be addressed for the organization to survive, excel, or achieve a major strategic initiative. The strategic issue defines what the organization needs to address and resolve to move the organization forward toward success by analyzing the data and information from the internal and external assessments as presented in the SWOT. Once the strategic issue is defined, strategies can be developed that address and resolve the strategic issue and propel the organization toward accomplishing its vision. The next chapter discusses how basic business level strategies are developed.  The development of the firm’s strategic issue is discussed in greater detail later in this chapter.