Starting a new company can be a very troublesome process especially if you don’t have a lot of management knowledge. However in order to be successful you need to understand a few aspects of the business world. A lot of people don’t know the difference between a business model and a business strategy. This two concepts are relatively similar but they have a few main differences between them. Today we will present a couple of concepts that will help you understand the business model vs. strategy quandary.

Business Model vs. Strategy Business Model vs. Strategy Pictures

A business model is a concept that must incorporate the company’s values, what it offers and how it brings profit. It focuses on matters such as understanding the client and trying to satisfy his needs, how to satisfy the customer’s need at a reasonable price and so on. It is focused on exploiting business opportunities. In simpler words a business model is the journey that an idea makes in order to turn into profit. However it does not incorporate the actual steps of marketing a product or a service. Furthermore it does not focus on external influences therefore it cannot predict the success of the business. One can say that in the business model vs. strategy dilemma, the model is the foundation on which the strategy will be build.

A business strategy focuses a lot on external influences such as competition. It has to analyze the competitive market, define the company’s position within the market, understand competitive threats and develop ways to deal with them. A business strategy must take into account variables such as globalization, and technological advancements. The strategy takes into account various business scenarios and includes the steps that need to be taken in each particular scenario. The more you learn about the business model vs. strategy concepts the more clear everything becomes.

In order to run a successful business you must be able to differentiate these two notions. Understanding the particularities of the business model and the business strategy can help you build and manage a successful company. A lot of young entrepreneurs hope to conquer the world with energy and enthusiasm but without having basic management skills they are unlikely to achieve their goals. A good business model can help you develop a solid product or service and a strategy can help you stay on top of the market. You need to apply both notions in order to be successful.

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