In formal management theory and practice, vision, goals, and objectives define the big WHATs, while strategy and business models describe how this will happen in practice… the big HOWs. Strategy decisions specify choices about where to compete and how to compete, and business models specify how those choices translate into a coherent system of activities, value propositions, and revenue and cost structures at enterprise or portfolio level.
At enterprise level, the vision provides the highest-level direction for the organization. From that starting point, leaders set long-term goals (qualitative) and translate these into more specific, measurable objectives that define expected targets in time-bound and quantifiable terms. Strategy then follows as the broad approach chosen to achieve these objectives, describing target markets, value positions, and competitive moves. Thus, strategy (the broad HOW) is anchored in goals and objectives (the WHATs), and it describes desired competitive positioning before any specific configuration of activities or offerings is finalized.
An enterprise-level business model expresses how the enterprise creates, delivers, and captures value. Business model definitions in the research describe how an organization creates, delivers, and captures value through its activity system, resource configuration, partner network, and revenue and cost architecture. Business model creation typically follows other strategy artifacts: Strategy tells the organization which customers and needs to prioritize and which competitive stance to adopt, while the business model lays out the interdependent activities and mechanisms that make the strategic intent feasible. When strategy shifts—whether due to growth, consolidation, digitization, or repositioning—the business model may require adjustment to better support the strategy. For example, a move toward digital services might shift the economic logic from one-time sales to subscription models, or a public-sector organization might need to rethink how it demonstrates value when funding structures change. The business model is distinct from strategy, but it must be compatible with the strategic direction if the organization expects to realize its objectives and goals.
Goals do not originate from the business model in the formal sense, but empirical work shows that existing business models influence which goals are considered realistic or attractive. Strategic goals can guide business model innovation paths, but current models and capabilities frame perceived possibilities and constraints. This means that the conceptual direction runs from goals and objectives to strategy and business models, while feedback runs from business models back to future goal setting through performance data, learning, and discovery of new opportunities or risks.
Corporate strategy defines overarching objectives, strategic positioning, and the role of the portfolio in realizing these choices. The portfolio of business models would typically then express how multiple, often interdependent models together contribute to those strategic objectives. Each model in the portfolio has its own value logic and target segment, but the portfolio is typically managed as a system with complementarities, diversification, and sensing functions that support corporate goals.
For a portfolio, the same logical order repeats in a nested way under the corporate umbrella. A portfolio vision articulates what the combined set of business models is expected to achieve for the organization, for example growth in specific domains, risk diversification, or learning about emerging technologies. Portfolio goals and objectives then specify quantitative and qualitative targets for the mix, such as revenue distribution across models, balance between exploitative and exploratory models, or required synergies. A portfolio strategic plan follows and defines which business models to initiate, scale, adapt, or retire, and which interdependencies to strengthen.
Then, a portfolio-level business model describes how the overall set of business models, taken together, creates and captures value for the corporation through complementarities, shared assets, and coordinated positioning. This portfolio-level business model aligns with the portfolio strategic plan, but it has a more structural focus on how models interact, share resources, and generate system-level effects. The strategic plan sets directions and priorities for the portfolio (it’s the strategic guidepost), and the portfolio-level business model expresses the design of interdependencies that will support those directions.
Strategy documents and plans at corporate level cascade into portfolio-level guidance, and then into design and management of individual business models and projects. Project portfolio management research and best practice standards (e.g. PMI and Axelos) describe portfolios as collections of initiatives assembled to meet strategic objectives. In practice, organizations translate strategic objectives into the selection, prioritization, and balancing of portfolio components (e.g. projects, programs, sub-portfolios, etc.), so that the overall portfolio (and it’s vision, etc.) supports the vision and goals set at higher levels. Alignment mechanisms and feedback loops support consistency between levels and allow adjustments when environmental conditions or performance results change.
In summary, the logically consistent order at both enterprise and portfolio levels is: vision and mission, then high-level goals, then measurable objectives, then strategy, and then business models as the operative expression of strategy.
References
- “Bridging strategic planning and business model management – A formal control framework to manage business model portfolios and dynamics” – Dietfried Globocnik, Rita Faullant, Zulaicha Parastuty
- “The business model portfolio as a strategic tool for value creation and business performance” – Peter Westerveld, Erik Fielt, Kevin C. Desouza, Guy G. Gable
- “Business Models in Contemporary Strategic Management” – Roland Schmuck
- “Business models, value capture, and the digital enterprise” – David J. Teece, Greg Linden
- “From strategic goals to business model innovation paths: an exploratory study” – Marikka Heikkilä, Harry Bouwman, Jukka Heikkilä
- “A Business Model View of Strategy” – Gianvito Lanzolla, Constantinos Markides
- “The influence of business strategy on project portfolio management and its success – A conceptual framework” – Sascha Meskendahl
- “Practices, projects and portfolios: Current research trends and new directions” – Stewart Clegg, Caryn J. Killen, Christopher Biesenthal, Shankar Sankaran
- “A business process and portfolio management approach for Industry 4.0 transformation” – Sébastien Richard, Réal Pellerin, Johanne Bellemare, Nathalie Perrier