Strategies vs. Business Models

Now, we address our second question.  What is the difference between a strategy and a business model?

A strategy is about the external logic of a business.  How are we going to compete? Check out my earlier post on the elements of a strategy for more about strategies.  A business model is about the internal logic of the business.  See my post on the elements of a business model. Does it make operational and economic sense?  Do all of the pieces fit together?

A business model is a tool that complements both a business strategy and a business plan. It is an important tool because 1) it ensures that you understand the logic of your business; and, 2) it helps you communicate the logic of your business. Of course, this begs the question, what is a business plan?


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