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?