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Today, business model and strategy are among the most sloppily used terms in business, but these are separate concepts with enormous practical value. And when it comes to concepts so fundamental to success, no organization can afford fuzzy thinking. The term business model emerged when personal computers and spreadsheets became common says Joan Magretta, a longtime editor at Harvard Business Review. Managers could use these tools to literally run the numbers to see models of how various decisions might affect the bottom line. A new business model might hinge on either a different way to make something or a different way to sell something. Take discount retailers like Kmart and Walmart, for example. These pioneers applied supermarket logic to the conventional department store and developed a discount retail model which involves slashing costs by eliminating chandeliers, carpets, and personal service in exchange for lower prices. While business model is a description of how your busines
