The relationship of business model with strategy

Business Model is a reflection of the firm’s realized strategy. 

In simple competitive situations there is a one-to-one mapping between strategy and business model, which make difficult to separate the two notions.  

Business Model refers to the logic of the firm, the way it operates and how it creates value for its stakeholders; and Strategy refers to the choice of business model through which the firm will compete in the marketplace.

A firm’s strategy primarily involves choosing its BM –  the design of which defines the value creation and capture logics specific to the firm.

Strategy and business model, though related, are different concepts, a business model is the direct result of strategy but is not, itself, strategy.

Quoted from Casadesus-Masanell, R. and Ricart, J., From Strategy to BMs and onto Tactics, Long Range Planning, 43 (2–3), 2010.

Business model is an institution.

One of very important understandings on business model is that “business model is an  institution”.

When you develop a business model, you should behave as you deal with a new institution.

Therefore, the study on institution so far contributes to the theory on business models.

By Kyoung Jun Lee (Quoted from his lecture)