Does the uncontrollable environment largely determine business performance or, instead, does the organization's strategy have a major impact on its performance? While the environment does influence corporate performance, there are successful businesses operating hi very demanding market and competitive environments.

Examples include Southwest Airlines (air travel), Hewlett-Packard (electronics), and Walmart (discount retailing).

The evidence suggests that strategic choices matter.35 While environmental factors such as market demand, intensity of competition, government, and social change influence corporate performance, the strategic choices made by specific companies also have an important impact on their performance. Importantly, the impact may be positive or negative.

For example, Kmart held a lead market position over Walmart in 1980, but Walmart overtook Kmart by investing heavily in information systems and distribution to develop a powerful customer-driven, low-cost retail network.