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Strategy and business model

Talk to several colleagues about strategy and business model: What is the relationship between strategy and business model, and which is more important or less important between them?

let's take a look at it as a whole: enterprise management is a systematic project, which is based on business model design, corporate governance as the source, strategic planning as the guide, organizational structure as the carrier, operation management as the core, process and information management as the main line, human resources and financial management as the support, corporate culture as the guide, and risk internal control as the guarantee to realize the enterprise strategy landing.

enterprise management map:

what is strategy?

the word strategy was originally a military concept. In the west, the word "strategy" comes from the Greek word "strategos", which means military general and local chief executive. Later, it evolved into a military term, referring to the strategy of military generals to command troops to fight. In China, the word "strategy" has a long history, and "war" refers to war, slightly referring to "strategy" and "deception". Sun Wu's The Art of War in the Spring and Autumn Period is regarded as China's earliest work on overall planning of strategy.

for China, there are far-reaching strategic plans of "Long-China confrontation" to unite Wu against Cao, three parts of the world, and "One Belt, One Road", all of which are strategic choices at the national level. For the United States, it is their political strategy to contain China and attack Russia on a global scale; Developing new energy, paying attention to the Internet and chip technology, the return of high-end equipment manufacturing, the research and development and application of big data, and the appreciation of the US dollar are their current economic development strategies.

therefore, strategy is both a plan and a choice.

the study of strategy in western management has been very mature. It has experienced the cognitive school of strategic management-entrepreneur school-learning school-design school-planning school-culture school-right school-structure school-orientation school-environmental adaptation school and so on. No matter which school, we can see that their focus is on building the core competitiveness of enterprises, so that enterprises have sustainable competitive advantages.

Tactics are a series of actions taken to design and develop the core competitiveness and gain the competitive advantage of enterprises.

of course, for enterprises, especially group enterprises, there are still problems of headquarters strategy and business strategy. Headquarters strategy is more of a development direction and a strategic choice for industry entry based on the analysis of external industries, macro-environment and internal resource capacity of enterprises. For each business unit, it may be necessary to consider the strategic choice of how to have competitive advantages such as low cost, differentiation or focus in sub-sectors or markets.

so, what is a business model?

compared with the relatively clear definition of strategic planning and systematic planning methods, the definition of business model is varied. For example, "business model is profit model", "business model is a unique logical path for enterprises to create value" and "business model is a strategic strategy". In recent years, there has also been a wave of business models in the market, and enterprises are scrambling to explore and innovate in business models.

Relatively speaking, individuals agree with the definition that "business model is the transaction structure between the target enterprise and its stakeholders in order to maximize the enterprise value". Based on this, we can also extend the concepts of "* * * living body" and "business ecology". "* * * living body": the sum of the business models of the target enterprise and its stakeholders; "Business Ecology": the sum of the * * * living body of the target enterprise and its competitors, business partners, upstream and downstream enterprises in the industrial chain and other stakeholders.

whether it is the overall description of business model-* * organism-business ecology, or the various descriptions of business models, we can see that the core of all descriptions can not avoid a key issue: the core of business model lies in value creation and trading model, which can also be understood as enterprise product value-added model.

Next, let's make a comparative analysis of corporate strategy and business model.

1. From the causal relationship, the two are mutually causal.

Building the core competitiveness of enterprises supports the realization of the unique value-added model of enterprise products.

the value-added model of enterprise products requires that the formulation of enterprise strategy, especially competitive strategy, must be based on the value-added model of products.

2, from the design goal, the two are consistent

The formulation of enterprise strategy is to cultivate the unique competitive advantage of the enterprise, so as to make the most favorable strategic choice for itself.

the unique value-added way of enterprise products in business model design is also to cultivate the unique competitive advantage of enterprises.

3. In terms of design methods, strategic design is more systematic

Analytical tools such as PEST analysis, Boston matrix analysis and SWOT analysis have not appeared in business model theory, and it is difficult to apply them in business model design.

However, we also see that some economists are trying to make quantitative analysis of business model design recently.

4. From the focus of attention, the two are different.

As for the business model of an enterprise, "* * * wins" is the best choice.

the development strategy of an enterprise is "different" and "superior".

5. From the form of expression, business models are more intuitive

Because it is difficult to classify, business models are often described through cases, such as Ali model, JD.COM model and Haidilao model, which endows the business model theory with concrete and vivid characteristics. These characteristics make the business model theory more instructive, acceptable and interesting to managers. Enterprises can learn from these specific models to build their own strategic measures. In addition, due to the intuition of business model, based on the analysis and innovation of business model, we can better find the source of core competitiveness of enterprises.

from the above analysis, it is not difficult to see that the business model solves the fundamental relationship and value output between enterprises and users, guides the cultivation direction of enterprise competitiveness, and is also the basic guarantee for the realization of enterprise strategy; The formulation of enterprise strategy ensures the sustainable operation of business model through the creation of core competitiveness.

so, which is more important, the strategic PK business model, which comes first?

I think it should be different for enterprises at different stages of development and enterprises in different competitive situations.

For start-ups, first make clear the business model, and then plan the strategic development;

For mature enterprises, the development direction should be formulated first, and then the business model should be optimized;

Being in perfect competition, enterprises attach importance to business model (unique value-added model) and neglect strategic development;

Enterprises in monopolistic competition pay more attention to development direction (cultivation of core competence) than business model;

for every enterprise, it may be difficult to make the best strategic choice, but it should have the best business model.