Purpose: The higher education sector in many countries is going through unprecedented changes. The changes are as a direct result of external and internal operating environments which are having a significant impact on universities. Externally, changing government policy; ongoing student growth and stakeholder demand for quality; and international developments in higher education are some of the many factors driving change in universities. Internally, change in leadership and renewed institutional strategy; and financial sustainability are some of the internal factors contributing to the changes within universities. The purpose of this paper is to outline the changing context of Australian higher education and argue the need for the renewed emphasis on strategy development and effective implementation in universities. Design/methodology/approach: The paper analyses the recurring themes related to strategy development, implementation and reviews from the external quality audits of all Australian universities in cycle one audit and 29 universities who completed cycle two audit until 2011. Findings: The paper argues the need for universities to engage in careful strategy development and implementation which aligns with institutional resourcing and risk management. Failure to engage in careful strategy development and effective implementation may put universities at risk in the current higher education landscape characterised by changing government policy and the political landscape in Australia. Originality/value: The literature on the effectiveness of strategy development and implementation in universities is limited. This paper attempts to fill the current gap by arguing the need for institutions to engage in careful strategy development at a time when governments cannot be trusted in the funding of universities. © Emerald Group Publishing Limited.