It is the plan implemented by a company to generate revenue and make a profit from operations.
Magretta defines Business Model as ‘Stories that explain how enterprises work’.
A Business Model depicts the content, structure and governance of transactions, designed so as to create value through exploitation of business opportunities.
A Business Model is the ‘logic’ of the firm, the way it operates and how it creates value for its stakeholders. A business model is how a company operates and a strategy is how a company competes. Strategies cannot be formulated without first understanding the fundamental elements of a business model.
When the basis of competition changes because a new model changes the economics in the industry, business models need to be adjusted and then the strategy realigned.
How corp. strategy links the organisation’s resources with its environment
