1. a. Explain the difference between a company’s business model and a company’s strategy.
A company’s strategy is actually the plan through which the company aims at its growth, at gaining market shares, customers and its position in the market. Furthermore, the specification of a company’s strategy leads the company through being successful and competitive to achieve its objectives. The business model of a company determines if the followed strategy makes sense and if it leads to profits, which is the main objective of business activities. The difference between a company’s business model and a company’s strategy is their scale of focus. From the one hand strategy relates to the general directions and approaches that a company follows…show more content… How well does strategy fit the company’s current situation? This question is called “The Goodness of Fit Test”. A business strategy must be well matched to the company’s current situation in order to be successful, which means that it must take into account the internal and external factors as well as the company’s capabilities and aspirations and the industry competition.
b. Is the strategy helping the company achieve a sustainable competitive advantage? This second question is called “The Competitive Advantage Test”. The goal of this test is to evaluate if the strategy is able to help the company build a durable competitive advantage. The bigger the advantage, the more powerful and effective the strategy.
c. Is the strategy resulting in better company performance? The third question is called “The Performance Test”. If a company presents better performance, then the followed strategy is successful. The company’s performance can be measured by two aspects. The first regards its profitability and the second regards the evolution of the company's business strength and competitive position in the market.
• Barnat R. (2014) “Strategic Management: Formulation and Implementation”, Retrieved from