The Role of the Competitive Context in the Business Strategy-Formulation Process

This paper deals with the relationships that exist between the competitive context of the firm and the way it formulates its strategy at the business level. A research project surveyed a sample of strategic business areas from medium and large-sized firms in Italy. The main results are that two environmental factors are particularly relevant: changes in the needs of the firm's customers and demand growth rate. Moreover, it transpired that even larger firms do not use sophisticated tools to formulate their competitive strategy.