Logic of Growth: Business Model versus Strategy

Abstract

Business literature has paid a remarkable deal of attention to the growth of the firm. Despite the enormity of research about this phenomenon the role of business model in this context has surprisingly received little attention. In some cases, it has also been mistakenly equated with the strategy of the firm. In this research the authors address these two issues in two steps. First the authors clarify the concept of business model and distinguish it from the concept of strategy. Second the authors show what roles these two can play in the growth of the firm separately and jointly. Therefore this research can serve two purposes: 1) to advance understanding of growth as a complicated phenomenon from the perspective of business model and its interactions with strategy and 2) to provoke further empirical and theoretical research on this emergent area of inquiry. The main conclusion drawn from this analysis is that, although business model is not strategy however these two are intertwined and their interactions form the underlying assumptions by which a firm grows.