At its core, a business strategy is a high-level plan for how an organization will compete and achieve its goals. It’s not just about what a company decides to do, but also about what it decides not to do. Strategy involves making deliberate choices to position the business in the market in a way that sets it apart from rivals.

The ultimate goal of any strategy is to create and sustain a competitive advantage. This is the unique edge that allows a company to attract and retain customers better than its competitors.

To build a solid strategy, a business first needs to understand its current situation. Several frameworks can help with this, starting with a look both inside and outside the company.

One of the most popular tools for strategic planning is the SWOT analysis. It’s a simple but powerful framework for organizing a company's strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors the company can control. Opportunities and threats are external factors it can't.

By mapping these four areas, a company gets a clear snapshot of its strategic position. The goal is to leverage strengths to seize opportunities, while minimizing the impact of weaknesses and guarding against threats.

While SWOT looks at the broader environment, Porter's Five Forces framework zooms in on the competitive landscape of a specific industry. Developed by Harvard Business School professor Michael E. Porter, this model helps businesses understand the sources of competition and the industry's potential for profitability.

The five forces are:

1. Threat of New Entrants: How easy is it for new competitors to enter the market? If it's easy, profitability for existing firms is lower.
2. Bargaining Power of Buyers: How much power do customers have to drive down prices? They have more power when there are many sellers and few buyers.
3. Bargaining Power of Suppliers: How much power do suppliers have to raise the price of inputs? They have more power when there are few suppliers of an essential input.
4. Threat of Substitute Products or Services: How likely are customers to switch to a different product or service that meets the same need? For example, video conferencing is a substitute for business travel.
5. Rivalry Among Existing Competitors: How intense is the competition between existing players in the market? High rivalry often leads to price wars and reduced profitability.

While Porter's model focuses on the external industry, the Resource-Based View (RBV) looks inward. This approach argues that a firm's unique internal resources and capabilities are its main source of competitive advantage, not just its position in the market.

Resources can be tangible, like machinery and capital, or intangible, like brand reputation, intellectual property, and company culture. To provide a lasting advantage, these resources should be hard for competitors to imitate. The VRIO framework is a great way to evaluate them.

A resource that is valuable, rare, inimitable, and for which the company is organized to capture value, is the foundation of a long-term competitive edge. This is what strategy aims to build and protect.

These frameworks—SWOT, Porter's Five Forces, and the Resource-Based View—are not mutually exclusive. They are powerful lenses that help leaders see their business and its environment from different angles, all in the service of crafting a winning strategy.