EVALUATING THE EXTERNAL ENVIRONMENT 1
Evaluating the External Environment and Decision Models
Tramaine Freeman
School of Business, Liberty University
Baera, E. J. (2025). Using scenarios to address uncertainty in planning for transport futures.
European Transport Research Review, 17(1), 12–24. https://doi.org/10.1186/s12544-025-
00710-3
Summary of Key Points
Baera (2025) explores how scenario planning can be applied to the field of transport
planning to address uncertainty in long-term infrastructure strategy. The article details
the design and use of exploratory scenarios, explaining how planners can use structured
foresight to account for political, economic, social, and technological shifts that are
difficult to predict. It emphasizes the value of articulating multiple plausible futures
rather than relying on linear forecasts, which often fail in volatile environments. By using
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scenario narratives, decision-makers can better anticipate disruptions, test strategies
against alternative possibilities, and avoid overcommitting to a single forecast. Baera
highlights case examples of regional transport planning processes in which scenario
development improved resilience and stakeholder engagement, demonstrating its
applicability beyond theory.
Evaluation of the Quality of the Publication
European Transport Research Review is a peer-reviewed, open-access journal published
by Springer. It is indexed in Scopus and Web of Science, which ensures rigorous
academic standards. Articles in the journal are widely cited by practitioners and
researchers in transport and strategic foresight, which enhances the credibility of the
publication. The journal’s focus on European case studies provides contextual insights,
but the theoretical grounding of Baera’s article makes it applicable to broader fields of
management and strategy.
Evaluation of the Quality of the Author
Baera is a researcher in transport foresight and infrastructure strategy. The article
demonstrates deep methodological understanding of scenario planning, supported by
clear explanations of frameworks and practical applications. Although Baera may be an
emerging scholar compared to senior academics in strategy, the rigorous methodology,
practical cases, and theoretical integration suggest a strong command of scenario
development techniques.
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Where This Fits into the Discussion
This source fits into the discussion of decision models, especially scenario planning. It
supports the argument that scenario methods go beyond SWOT by explicitly addressing
uncertainty and fostering resilience. The insights on how scenario planning strengthens
organizational foresight provide direct application to evaluating the external
environment, making the article essential to understanding how firms can adapt to
uncertain futures.
Ciampi, F., Demi, S., Magrini, A., Marzi, G., & Papa, A. (2021). Exploring the impact of big data
analytics capabilities on business model innovation: The mediating role of dynamic
capabilities. Management Decision, 59(8), 1735–1752.
https://doi.org/10.1016/j.jbusres.2020.09.023
Summary of Key Points
Ciampi et al. (2021) investigate the relationship between big data analytics capabilities
(BDAC), dynamic capabilities, and business model innovation (BMI). Using survey data
collected from European firms, the study demonstrates that BDAC significantly enhances
business model innovation by enabling organizations to sense environmental changes,
seize opportunities, and transform processes. The article adopts the dynamic
capabilities view, arguing that BDAC functions as an enabler of adaptation rather than a
direct driver of innovation. Results show that firms with stronger BDAC are more agile
and able to reconfigure resources, giving them a sustainable competitive advantage in
volatile environments. The authors conclude that analytics infrastructure and digital
competencies are critical determinants of long-term success.
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Evaluation of the Quality of the Publication
Management Decision is a highly regarded peer-reviewed journal focusing on strategic
management and decision sciences. It is included in leading academic databases such as
Scopus and Web of Science, ensuring rigorous scholarly standards. The journal regularly
publishes cutting-edge research that bridges theory and practice, and this article’s
empirical methodology (structural equation modeling) demonstrates methodological
rigor. Its findings contribute meaningfully to both strategic management theory and
practice in digital transformation.
Evaluation of the Quality of the Authors
The authors are established European academics specializing in strategy, innovation, and
data analytics. Their affiliations with respected universities across Italy and other
European countries enhance the credibility of the study. Their publication history shows
consistent contributions to the fields of strategic management and digital
transformation, further affirming the authority of the research.
Where This Fits into the Discussion
This article supports the section on key sources of power and weakness. It provides
empirical evidence that BDAC represents a strategic asset when paired with dynamic
capabilities, while lack of adaptability is a significant weakness. By emphasizing how
BDAC drives innovation indirectly through capabilities, the study reinforces the
importance of evaluating technological and organizational resources when analyzing the
external environment.
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Rizvi, S. A. A., Ali, M., & Raza, H. (2023). The role of big data analytics capability to achieve
competitive advantage with the mediation of business model innovation: A dynamic
capability view. Global Management Sciences Review, 8(1), 34–53.
https://doi.org/10.31703/gmsr.2023(VIII-I).03
Summary of Key Points
Rizvi et al. (2023) empirically examine how BDAC contributes to competitive advantage,
focusing on organizations in the manufacturing and service industries in Pakistan. The
study applies the dynamic capabilities framework and finds that BDAC enhances
competitive advantage directly and indirectly through business model innovation. The
moderating effect of IT infrastructure is also highlighted, showing that BDAC has greater
impact when supported by strong technological foundations. The research uses
structural equation modeling with Smart PLS, providing statistical validation of
relationships between BDAC, BMI, and competitive advantage. Findings emphasize that
firms with robust BDAC are better positioned to adapt to external changes, innovate
offerings, and sustain long-term competitiveness.
Evaluation of the Quality of the Publication
Global Management Sciences Review is a peer-reviewed journal that focuses on
emerging issues in management sciences. While it is regionally oriented toward South
Asia, the journal adheres to international standards of peer review and maintains
scholarly rigor. The article’s empirical foundation and transparent methodology
strengthen its reliability. Although it may not carry the same global ranking as journals
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like Management Decision, its contribution is valuable, especially for examining BDAC in
developing market contexts.
Evaluation of the Quality of the Authors
The authors are academics and researchers specializing in strategic management, IT
governance, and business innovation. Their backgrounds reflect expertise in emerging
market research, where digital transformation often faces unique challenges such as
limited infrastructure and resource constraints. Their focus on empirical analysis and
theory-driven design demonstrates academic credibility.
Where This Fits into the Discussion
This study reinforces the argument that BDAC is a vital source of strategic power and
that IT infrastructure enhances its effect. It directly connects to the discussion of power
and weakness by showing how technological infrastructure supports adaptation. The
findings provide additional evidence that digital capability evaluation is crucial in
external environment analysis, offering practical insights for organizations in both
emerging and developed economies.
Evaluating the External Environment and Decision Models
Evaluating the external environment is a foundational step in strategic management
because it enables organizations to identify opportunities and threats before crafting strategy.
The external environment consists of macro-level forces—economic, political, social,
technological, environmental, and legal—as well as industry-level dynamics (Gamble et al.,
2021). Firms that ignore environmental scanning risk strategic misalignment and declining
competitiveness (Rumelt, 2011). Decision models such as SWOT and scenario planning provide
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structured approaches for analyzing complex conditions, mitigating cognitive bias, and
improving strategic choices (Baera, 2025; Krogerus & Tschäppeler, 2018).
Process: Evaluating the External Environment
The process of environmental evaluation begins with scanning, where firms identify
broad external trends. PEST frameworks help capture political, economic, social, and
technological shifts (Gamble et al., 2021). This is followed by industry analysis, where models
such as Porter’s Five Forces examine competitive rivalry, new entrants, substitutes, suppliers,
and buyers. Although Porter’s model is foundational, more recent work has emphasized
business ecosystems and dynamic capabilities, where firms adapt to evolving environmental
pressures through agility and innovation (Ciampi et al., 2021).
Next, firms engage in monitoring, tracking how external forces evolve over time, and
forecasting, projecting likely future conditions. Forecasting is increasingly data-driven, aided by
analytics and scenario techniques that enhance predictive accuracy (Rizvi et al., 2023). Finally,
managers assess the implications of these external trends for firm strategy, determining where
opportunities exist and what risks must be mitigated.
This scanning–monitoring–forecasting–assessment cycle is continuous and critical in
volatile industries. For example, scenario planning enables firms to visualize multiple plausible
futures and prepare robust strategies in response to uncertainty (Baera, 2025). As Rumelt
(2011) notes, good strategy depends on accurate diagnosis of environmental challenges, which
makes systematic external evaluation indispensable.
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Strategic Thinking: Key Source of Power or Weakness
A key source of power in today’s environment is big data analytics capability (BDAC).
BDAC enables organizations to identify consumer trends, innovate business models, and
outperform competitors. Ciampi et al. (2021) found that BDAC supports business model
innovation by enhancing dynamic capabilities, which in turn strengthens competitive
positioning. Similarly, Rizvi et al. (2023) demonstrated empirically that BDAC improves
competitive advantage when integrated with strong IT infrastructure.
Conversely, a critical weakness is the lack of dynamic capabilities, defined as an
organization’s ability to integrate and reconfigure competencies in response to changing
environments. Without these adaptive capacities, firms risk inertia and strategic decline (Ciampi
et al., 2021). For instance, firms heavily dependent on legacy systems often struggle to respond
to technological disruption, creating vulnerabilities relative to digitally agile competitors.
Recognizing BDAC as a source of power and weak adaptability as a liability highlights the
centrality of digital agility to long-term competitiveness (Ciampi et al., 2021).
Decision Model
My current decision model is SWOT analysis, which organizes information into strengths,
weaknesses, opportunities, and threats. SWOT is useful for structuring internal and external
factors holistically but limited because it often produces lists without prioritization or actionable
strategy (Krogerus & Tschäppeler, 2018).
Other decision models under consideration include scenario planning, which allows
managers to explore different futures and build resilience under uncertainty (Baera, 2025). This
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approach is especially effective in industries where environmental forces are volatile and
unpredictable (Gamble et al., 2021).
How Decision Models Aid or Hinder External Evaluation
SWOT aids environmental evaluation by forcing managers to consider internal strengths
and weaknesses alongside external opportunities and threats. However, it hinders deeper
analysis because it does not weigh or prioritize factors and lacks integration into strategic action
(Krogerus & Tschäppeler, 2018).
By contrast, scenario planning aids by compelling leaders to anticipate multiple plausible
futures, which improves resilience in uncertain contexts (Baera, 2025). Its drawback is the time
and data requirements, but it strengthens long-term strategic preparedness (Gamble et al.,
2021).
What Other Decision Models Are Being Considered and Why
Beyond SWOT, I am considering scenario-based decision analysis (SBDA), which
integrates scenario narratives with quantitative analysis to manage uncertainty. This approach
provides richer insights than SWOT because it links environmental conditions directly to
decision pathways (Baera, 2025). Compared to SWOT, SBDA incorporates uncertainty directly
into the decision process, making it more useful in turbulent environments (Rizvi et al., 2023).
Conclusion
Evaluating the external environment involves scanning, monitoring, forecasting, and
assessing macro- and industry-level factors (Gamble et al., 2021). Sources of strategic power,
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EVALUATING THE EXTERNAL ENVIRONMENT such as BDAC,
enable agility and innovation, while weaknesses like limited dynamic capabilities reduce
competitiveness (Ciampi et al., 2021; Rizvi et al., 2023). SWOT provides a simple decision model
but is limited in strategic application, whereas models such as scenario planning and SBDA offer
more resilient and adaptive approaches (Baera, 2025). Integrating advanced decision models
with external environment evaluation enhances strategic alignment and positions organizations
for long-term success (Rumelt, 2011).
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References
Baera, E. J. (2025). Using scenarios to address uncertainty in planning for transport futures.
European Transport Research Review, 17(1), 12–24. https://doi.org/10.1186/s12544-
025-
00710-3
Ciampi, F., Demi, S., Magrini, A., Marzi, G., & Papa, A. (2021). Exploring the impact of big data
analytics capabilities on business model innovation: The mediating role of dynamic
capabilities. Management Decision, 59(8), 1735–1752.
https://doi.org/10.1016/j.jbusres.2020.09.023
Gamble, J. E., Peteraf, M. A., & Thompson, A. A. (2021). Essentials of strategic management:
The quest for competitive advantage (7th ed.). McGraw-Hill Education.
Krogerus, M., & Tschäppeler, R. (2018). The decision book: 50 models for strategic thinking
(Updated ed.). W. W. Norton & Company.
Rizvi, S. A. A., Ali, M., & Raza, H. (2023). The role of big data analytics capability to achieve
competitive advantage with the mediation of business model innovation: A dynamic
capability view. Global Management Sciences Review, 8(1), 34–53.
https://doi.org/10.31703/gmsr.2023(VIII-I).03
Rumelt, R. P. (2011). Good strategy/bad strategy: The difference and why it matters. Crown
Business.
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