Managed care environments have proven difficult for most health care organizations. Academic medical group practices also called faculty practice plans - in particular have faced enormous challenges in making strategic adaptations to rapidly evolving health care markets. Recent evidence suggests that academic practices have been less than successful in implementing strategies focused on cost leadership and affiliations with primary care physicians. This article asserts that academic group practices cannot succeed by copying strategies implemented by other medical group practices because they have dissimilar missions, organizational capabilities and environmental constraints. The authors use the TOWS matrix - an acronym for threats, opportunities, weaknesses and strengths - a decision analysis framework that integrates both organizational and environmental factors, to assist executives in strategically positioning academic group practices.