A company’s business model describes the basic means by which it creates value, delivers value to customers, and collects revenue from customers to make a profit. Business models can vary greatly from one company to another. A local grocery store’s business model might involve buying food at wholesale prices and selling it to end consumers at a higher price to make profit. A website might have a business model based on providing video content to customers and generating revenue through advertisements placed on the site.
A business model describes and explains how a company works and makes money. A business strategy describes and explains how, where and for what purpose and goal a business model will be used.