What Is Strategy? ■ A firm’s strategyrefers to the actions that managers take to attain the goals of the firm ■ Firms need to pursue strategies that increase profitability and profit growth – Profitability is the rate of return the firm makes on its invested capital – Profit growth is the percentage increase in net profits over time ■ To increase profitability and profit growth , firms can – add value – lower costs – sell more in existing markets – expand internationally