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

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... late their competitive strategy. The characteristics of the competitive context are considered by some authors 1 to be the factor that most strongly influences the type of strategy a company pursues or can formulate, and the level of profitability. 2 It is also accepted 110 Donatella Depperu is a professor of business administration at