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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 todoi:10.2753/imo0020-8825360306 fatcat:k53ls4w7ind4da6affeweg6rjq