The March 2021 edition of the prestigious Journal of Management Studies contains no fewer than three articles on the topic of business models versus strategy. What makes them different; in practice, does this matter?

Intuitively, clear differences do seem to exist in practice. Strategy, one might say, is about the “what” that firm leaders must ask. What markets, clients and services will we prioritise? What objectives will we set? Business models, on the other hand, are about “how” questions. How will we organise to meet our objectives and optimise performance? How will we deliver value to clients that increases the likelihood of them instructing us again? How will we attract and retain the best people? Structures, systems and processes a firm puts in place and how these are used seem to be more aligned with the “how” than what we usually call strategy. Business models are inextricable with corporate governance. They involve managing and optimising the interdependencies and connections that inevitably occur across a firm. They have a profound effect on a firm’s success.

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