The importance of strategic management in international business: Expansion of the PESTEL method

Abstract

Not only global but also regional links have strengthen considerably in the recent years. Globalization can be both a threat and an opportunity for international companies. To take advantage of the globalisation changes, companies must rethink their strategies and seek new tools that would help them stimulate innovation and growth in international markets. Managers should avoid strategic myopia, which arises as they merely follow the established tools, step by step, without a wider understanding of a concept. The purpose of this paper is to demonstrate the importance of strategic management in international business and to present an expansion of the PESTEL method. The conceptual paper introduces a new tool in strategic management theory: REGLO analysis, an improved version of PESTEL analysis which marks out globalisation and regionalisation forces that are a great part of today’s external environment. Moreover, the article emphasizes the need for improvement of some popular strategic management tools that are used by the majority of companies in the current decade.