Will business model innovation replace strategic analysis?

Abstract

Purpose

This masterclass aims to consider a number of recent business articles and books that can help practitioners clarify the distinction between the strategy development and business model approaches and decide which is appropriate for their situation.

Design/methodology/approach

The article defines the difference between the two approaches this way: business models explain who your customers are and how you plan to make money by providing them with value; strategy identifies how you will beat competitors by being different.

Findings

The paper reveals that a business model approach has limitations. It will not help an organization develop a competitive advantage, outperform its competition, acquire or merge with another organization, or diversify. However, corporate strategy does not identify how to deliver unique value to meet customers' needs.

Practical implications

The main reason why organizations fail at business‐model innovation is too much “tweaking” – incremental attempts at improvement in myriad projects when more radical change to its business model is the answer.

Originality/value

The article proposes that businesses need both strategy development and business model innovation to adapt and thrive as conditions change.

Citation

Abraham, S. (2013), "Will business model innovation replace strategic analysis?", Strategy & Leadership, Vol. 41 No. 2, pp. 31-38. https://doi.org/10.1108/10878571311318222