The document discusses several papers related to business models and strategy. It argues that a business model is an abstraction of a firm's strategy, depicting how it creates and captures value. Strategy determines the business model options available and business models guide tactical decisions. Later papers integrate these concepts, stating that strategy determines the business model, which then defines available tactics. Together, strategy, business models, and tactics allow firms to achieve their goals but business models must also be difficult to imitate to provide competitive advantage.

1. Seddon, P. B., Lewis, G. P.,
Freeman, P., & Shanks, G.
2004. The case for viewing
business models as an
abstraction of
strategy.

2.  Keywords: strategy, business model, competitive advantage, eBusiness
 The paper examine the meaning of “business model” and “strategy”,
aiming to explain why it might be useful to use the term “business
model” to mean an abstraction and “strategy” to mean to mean a
particular firm’s plan
 The authors argue that the terms are frequently but the meanings are
misunderstood but:

4.  The goal with the diagram is to “suggest that it might
be helpful to view the difference between a business
model and a strategy as a difference in the level of
abstraction”.
 For the authors, the overlapping with the two concepts
is so big that if there is no abstraction there would be no
point in having two terms.

5.  Regarding Strategy the main author is Porter [1996,2001]
 For Business Model is Magretta [2002]

6. Strategy by Porter

7. Business Models by Magretta

8.  The arguments are summed up in the following definition:
Conclusions

9. Casadesus-Masanell, R., &
Ricart, J. E. 2010. From
strategy to business models and
onto tactics.

10. Integrating strategy,
business model and tactics

11.  Organized framework to integrate and relate the notions of
strategy, business model and tactics.
 The figure shows related but different concepts
 “Strategy is a contingent plan of action as to what business
model to use. The firm’s available actions for strategy are
choices (…) that constitute the raw material of business
models.”
 “Business models are reflections of the realized strategy. “
 “(…) tactics are also plans of action, which take place within
the bounds drawn by the firm’s business model.”

12.  Conceptual framework to separate and relate concepts
 “a business model, we argue, is a reflection of the firm’s
realized strategy.”
 Strategy and business model differ when there are
important contingencies
 Clear distinction between strategy and tactics

13.  Business model is about how an organization earns money
 How it identifies and create value for customers
 How it captures of this value as its profit in the process
 “’A business model depicts the content, structure, and
governance of transactions designed so as to create value
trough the exploitation of business opportunities’”
 Content: goods or information exchanged
 Structure: parties that participate
 Governance: the way flows of information, resources and goods
are controlled
 Parts of business models
 Choices – made by management about how to operate
 Consequences of the choices
Business models

14. choices
Policy
choices
Asset
choices
Governance
choices
Business models
 Business models often generates virtuous cycles, they are not
part of the definition but can be crucial.
 Often too complex and unwieldy to represent for working with
so the analyst must simplify using aggregation and
decomposition.

15.  Tactics are residual choices
 They play a crucial role in determining how much
value is created and captured by firms
 The tactical choices from a firm affect the value creation
a value capture of other firms with which it interacts.
 Business model employed by a firm determines the
tactics available.
 Business models and tactics are intimately related
Tactics

16.  “(…)plan of action designed to achieve a particular
goal.”
 Porter states “strategy is the creation of a unique and
valuable position, involving a different set of activities.”
Strategy

17. Strategy and Business Models

18. Strategy and Tactics
 “In the analogy of the automobile, strategy is about
changing features of the automobile such as shape,
engine power, wheels, seats, etc... Tactics, however, are
about what one does with the automobile, such as
driving it fast or slow, or with the windows down.
Reconfigurations to the car are possible, but costly, but
tactical changes are usually (comparatively) easy to
implement in the short term.”

19.  A business model is a direct result of strategy, but is not, itself,
strategy.
 Tactical interactions has well-defined rules of play. Strategic
interaction is more complex.
 For every business model modification, the designer need to
assess the effects that will have on tactics.
 Authors conclude that the exercise of designing a new business
model is close to an art.
 They believe that clear definitions is a necessary condition for
progress in the field.
Conclusions

20. Teece, D. J. 2010.
Business models, business
strategy and innovation.

21.  Paper with the purpose to understand the significance
of business models and explore their connections.
 A business model defines how the enterprise creates
and delivers value to customers, and then converts
payments received to profits.
 Business model innovation can it self be a path way to
competitive advantage.
 Business model – the theoretical foundation
 Despite the importance it lacks of an intellectual development
 In economics textbooks business models are an unnecessary
step.
 They also lack of an acceptable place in organizational and
strategic studies, and in marketing science.

22.  Business model is about the benefit the enterprise will deliver to
customers, how it will organize to do so, how it will capture a
portion of the value that it delivers.
 Develop a successful business model is insufficient by itself to
assure completive advantage.
 Strategy analysis is an essential step in designing a competitively
sustainable business model.
 Having a differentiated architecture for an enterprise’s business
model is important to the establishment of competitive advantage.
 But innovating will no build by itself a competitive advantage.
 It is important that the business model are not easy to copycat.
Three factors to prevent:
 Implementing a business model with systems, processes and assets
hard to replicate
 Level of opacity
 Incumbents in the industry may be reluctant to copycat if it involves
cannibalizing or upsetting other important business relationships.

23.  Scholars have recognized that technological innovation without a
commercialization strategy is likely to lead to (self-)destruction.
 Good business model design and implementation, coupled with
careful strategic analysis, are necessary for technological innovation
to succeed commercially.
 There are two extreme modes by which innovators can capture
value from innovation:
 The firm assumes the responsibility for the entire value chain
 Outsourced business approach
 In between, a mixture of the previous approaches

24.  The creation of new organizational methods and in particular new
business models are of equal – if not greater – importance to society,
and to the business enterprise.
 The innovator will fail if he cannot offer a valuable proposition to
customers and set up a profitable business system.
 Designing a new business model requires creativity, insight, and a
good deal of customer, competitor and supplier information and
intelligence.

25.  Designing a good business models is in part an art.
 “Get the business model wrong, and there is almost no chance of
business success e get it right, and customize it for a market
segment and build in non-imitable dimensions, and it will
contribute to the firm’s competitive advantage.”
 Conclusions
 A business model describes the design r architecture of the value
creation, delivery and capture mechanisms employed. It crystallizes
about what customers want, how they want it and what they will
pay, and how an enterprise can organize to best meet customer
needs, and get paid well for doing so.
 Business model must be more than a good logical way of doing
business, it must also be non-imitable in certain respects.
 is common to see great technological achievements fail
commercially because little, if any, attention has been given to
designing a business model to take them to market properly.