Developing sound corporate strategy has become both more important and more difficult as the euphoria of the 1990s has yielded to the realities of managing a company in today’s uncertain and confusing business environment. With the world economy becoming increasingly integrated and geopolitical tensions continuing to rise, the challenge of crafting and implementing strategies successfully grows ever more daunting. True, the technological advances of the 1990s were followed by a massive merger movement, which continued to create new economies of scale. But with the help of a stagnating global economy, those developments have generated crushing overcapacity in industry after industry—telecommunications, high-tech equipment, and airlines, to name just a few.

Business leaders now face deflationary pressures, which are squeezing profit margins and the availability of capital for investment. Indeed, many companies wonder if their long-standing business models are sustainable. During the past year, for example, the Quarterly has explored the near collapse of the hub-and-spoke system of many US airlines, the troublesome new meaning of quality for US automakers, and the need for pharmaceutical companies to overhaul a sales and marketing approach that served them immensely well for decades.

Such challenging times make it particularly necessary for strategists to think...