Business Model

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Long Range Planning 43 (2010) 195e215

From Strategy to Business
Models and onto Tactics
Ramon Casadesus-Masanell and Joan Enric Ricart

Strategy scholars have used the notion of the Business Model to refer to the ‘logic of the firm’ e how it operates and creates value for its stakeholders. On the surface, this notion appears to be similar to that of strategy. We present a conceptual framework to separate and relate the concepts of strategy and business model: a business model, we argue, is a reflection of the firm’s realized strategy. We find that in simple competitive situations there is a one-to-one mapping between strategy and business model, which makes it difficult to separate the two notions. We show that the concepts of strategy and business model differ when there are important contingencies on which a well-designed strategy must be based. Our framework also delivers a clear distinction between strategy and tactics, made possible because strategy and business model are different constructs. Ó 2010 Elsevier Ltd. All rights reserved.

The field of strategy has evolved substantially in the past twenty-five years. Firms have learned to analyze their competitive environment, define their position, develop competitive and corporate advantages, and understand better how to sustain advantage in the face of competitive challenges and threats. Different approaches - including industrial organization theory, the resource-based view, dynamic capabilities and game theory - have helped academicians and practitioners understand the dynamics of competition and develop recommendations about how firms should define their competitive and corporate strategies. But drivers such as globalization, deregulation and technological change (to mention only a few) are profoundly changing the competitive game. Scholars and practitioners agree that the fastest growing firms in this new environment appear to be those that have taken...
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