The Triangle: Strategy Based upon Bonding

An effcctive business model needs to meet two criteria. First, the model should be able to explain how businesses and firms achieve superior financial performance. This is the descriptive side of the model. By observing the actual performance of a collection of businesses and applying the basic concepts implicit in the model, we can understand better the heterogeneity in firm performance. Second, and perhaps more important from a practical point of view, is the normative side of the model. The framework should provide guidelines and tools that will help to create a winning strategy and support the successful implementation of that strategy. The existing business models are at best incomplete in both dimensions.