Strategy and business models: why winning companies need both

Strategy and business models: why winning companies need both PurposeThis paper aims to highlight the importance of addressing both competitive strategy and business model for the long-term success of a company. The paper builds a prescriptive framework to help managers assess their companies’ positions based on the extent to which they attend to their strategies and business models simultaneously. In doing so, the paper offers four possible outcomes – idling, faceoff, breakdown and traction – providing examples to capture each scenario and managerial prescription.Design/methodology/approachThe framework of this study is based on academic research in strategy and business model design, the authors’ scholarly work on innovation and their combined experiences and observations in the industry. The framework uses examples of well-known companies to make the case for why managers need to pay heed to both business models and strategies simultaneously to achieve long-term competitive profitability.FindingsThis study’s framework suggests that the delicate balance between strategy and business model design determines the long-term competitive advantage and profitability of a company. Focusing on strategy without paying heed to the business model can cause companies to lose sight of changing customer behaviors. Alternatively, managerial attention to business models at the exclusion of its strategy leaves the company vulnerable to competition. The framework points at the delicate strategy–business model balance required to manage winning companies.Originality/valueBusiness models and strategies represent two separate yet inextricably linked domains under the purview of management. However, companies can be weakened because of an overemphasis on one at the expense of the other. This paper’s framework offers a simple yet effective guide to assist managers in assessing their organizations’ current positions while also providing direction toward addressing any shortcomings. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Business Strategy Emerald Publishing

Strategy and business models: why winning companies need both

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0275-6668
DOI
10.1108/JBS-01-2019-0005
Publisher site
See Article on Publisher Site

Abstract

PurposeThis paper aims to highlight the importance of addressing both competitive strategy and business model for the long-term success of a company. The paper builds a prescriptive framework to help managers assess their companies’ positions based on the extent to which they attend to their strategies and business models simultaneously. In doing so, the paper offers four possible outcomes – idling, faceoff, breakdown and traction – providing examples to capture each scenario and managerial prescription.Design/methodology/approachThe framework of this study is based on academic research in strategy and business model design, the authors’ scholarly work on innovation and their combined experiences and observations in the industry. The framework uses examples of well-known companies to make the case for why managers need to pay heed to both business models and strategies simultaneously to achieve long-term competitive profitability.FindingsThis study’s framework suggests that the delicate balance between strategy and business model design determines the long-term competitive advantage and profitability of a company. Focusing on strategy without paying heed to the business model can cause companies to lose sight of changing customer behaviors. Alternatively, managerial attention to business models at the exclusion of its strategy leaves the company vulnerable to competition. The framework points at the delicate strategy–business model balance required to manage winning companies.Originality/valueBusiness models and strategies represent two separate yet inextricably linked domains under the purview of management. However, companies can be weakened because of an overemphasis on one at the expense of the other. This paper’s framework offers a simple yet effective guide to assist managers in assessing their organizations’ current positions while also providing direction toward addressing any shortcomings.

Journal

Journal of Business StrategyEmerald Publishing

Published: Sep 3, 2019

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