Let me introduce the idea of the strategist's challenge. When one is doing a strategic analysis one needs to ask three fundamental questions. The first question is what are the values of the organization? And by this I mean the values, the mission, the scope of the organization. How do they define themselves? One way to analyze a firm's values or its missions is to look at its mission statements. Most publicly traded companies have these displayed on their website or their corporate annual report. And here's a few that I'd like to share. So one from the Walt Disney Company, the mission of the Walt Disney Company is to be one of the world's leading producers and providers of entertainment and information. So first of all it defines the industry in which Disney operates, entertainment and information, that's somewhat interesting. Second, they define their aspirations. They want to be one of worlds leading producers. A global company and one of the leaders producers within the entertainment and information segment. Consider Google's mission statement. To organize the world's information and make it universally accessible and useful. Very broad definition here. One in which they express very high aspirations here in terms of what they're looking to accomplish. Contrast that with Dell. Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. They define themselves as the computer company to find how they're going to deliver better value. By delivering the best customer experience. Consider Citigroup. Citigroup is to be the most respected global financial services company. Like any other public company, we're obligated to deliver profits and growth to our shareholders. Of equal importance is to deliver these profits and generate growth responsibly. What I find interesting here is now we've incorporated values explicitly into the mission statement. Their objective is beyond just delivering profits. But also to deliver profits and generate growth in a responsible way. So you see these values starting to permeate their statement. Consider Chevron. One might thing of Chevron as an oil company but they define themselves, at least, as our vision is to be a global energy company most admired for its people, partnership, and performance. Again, starting to talk about the strategic plan by which they will deliver on this mission and vision. Think of McKesson, our mission is to provide comprehensive pharmaceutical solutions that improve productivity, profitability, and result in superior patient care and satisfaction. Again, defining the means by which they will deliver on their broader mission. Consider Ford Motor Company. We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world. I highlight the personal mobility, not just cars, but personal mobility, a broader mandate there, and a proud heritage, talking about some of their values. Last but not least, Facebook. Their mission is to give people the power to share and make the world more open and connected. Similar to Google's mission, a very broad and expansive mission statement here that you can only imagine could go in a lot of different directions. I think it's very tempting when looking at mission statements to be tempted to say these are just the verbage we put on the wall and do they really have much meaning? But I think at the end of the day, they do start to expose and reveal a lot of what the company thinks about their values. And this is important. I think some are tempted to say that the mission of organizations in particular businesses is to maximize shareholder return. That's a premise that I think is both incorrect legally and also philosophically. At the end of the day, organizations including publicly traded companies have an ability and some discretion to define what their mission and values are. Consider the following example, Bill Gates. One could argue that when Bill Gates started Microsoft, his goal was not to maximize investor’s returns, his goal was to create the world's greatest software company. That’s what motivated him. That was what inspired him and that is what inspired many others to join on and pursue that mission. Now of course, profitability was an output of that activity. But again, that arguably was a secondary outcome from the broader mission of developing a world class software company. And I think see in many high performing organizations, that mission first and foremost defines who they are and what they're trying to achieve. So values again, a critical piece of the Strategist's Challenge and one of the questions one must ask when doing a strategic analysis. The second thing you must ask yourself is about opportunities. So opportunities are the external environment in which you operate in. What does the market value? What does the market demand? And are there. Others out in the space providing value in similar ways. The competitive effect here. Consider the following example. Kodak. For nearly 100 years, Kodak was one of the leading companies in the world. Producers of film, pioneers in film, they had both capabilities and values and a mission statement that allowed them to be highly successful. But the world changed and as you might guess, with the advent of digital technology, Kodak declared bankruptcy a few years back. What happened? Well, the opportunity set changed for them ultimately. So while, wonderful organization, great capabilities, wonderful mission and values, at the end of the day opportunities were not available to them, at least in the way they had historically defined their business. Last but not least, our capabilities and this is where we take a more internal focus. What does the company do well? What are their capabilities? What are their assets that they might have that they can leverage to meet market opportunities? There is a few things you wanna think about here. In particular, we're gonna introduce the idea of competitive advantage. Now competitive advantage is a term you hear bantered about in the popular business press all the time. But it really has a specific meaning that it's going to be clear about. Competitive advantage is always relative to your competition. It's not sufficient to just be good at something or even to be great at something. If everyone else is great as well. So if you have a high quality product but everyone else in the market has a high quality product, that's not a competitive advantage. So we're really gonna be interested in understanding those distinctive things that a firm does that differentiate it from it's peers. Taking together values, opportunities, and capabilities define the Strategist's Challenge and the three main questions we need to ask. It's at the intersection of those three questions that reveals valuable competitive positions. Those positions within a market that an organization can take that will allow them to survive and thrive and create the most value for its stakeholders.