Strategy, Business Model, or Tactics? Here’s How to Tell the Difference

I conduct workshops on Strategy & Innovation. And almost every time, someone asks a version of the same question: Aren’t strategy and tactics basically the same thing? And where does business model fit in?

Borrowing an analogy from Harvard Business School

Let me explain, using the same analogy Harvard Business School researchers Ramon Casadesus-Masanell and Joan Ricart use — building and driving a car. It’ll make sense once we get through it, and I’ll simplify it with examples at the end.

Here’s how the paper frames it: every car has its own way of operating. A hybrid runs differently from a conventional engine. A manual drives differently from an automatic. Different cars suit different needs — a small car for congested city streets, a large SUV for open countryside, a standard transmission for control. None of these is the “right” car. Each is built for a different job.

Strategy, business model, and tactics — in one sentence each

Here’s how it explains the terms:

Deciding which of these to build — based on who you’re serving, what job you need the car to do, and how you intend to do that better than others — is Strategy.

The car you actually end up building is the Business Model.

The day-to-day moves you make once that car is in use are Tactics.

Why the difference actually matters

Now here’s the interesting part: the car you build decides what moves you even have available while driving it. A powerful SUV simply can’t thread a narrow city lane the way a small compact can — that move isn’t on the table, no matter how skilled the driver is.

So if your competitor is driving a fundamentally different car, no amount of clever driving (tactics) closes the gap. The only real fix is to build a different car — that’s strategy stepping in to redesign the business model, not tactics trying to compensate for it. And once that model exists, tactics are simply what you do inside it — which is why the same tactical move can win in one business and fail completely in another.

Let’s look at a few interesting moves and work out what they actually are — strategy, business model, or tactics.

Jio: when a competitor is running a different business model

In 2016, Jio entered Indian telecom with free voice calls and dirt-cheap data. Airtel, Vodafone, and Idea responded the way most companies do with tactics: they cut prices, ran counter-offers, launched promotions. None of it worked.

Jio wasn’t simply being more aggressive within the old model — it was operating from a different one altogether. It built an all-IP 4G-only network from scratch, carrying none of the 2G/3G infrastructure costs its rivals were still maintaining, and it was backed by Reliance’s balance sheet rather than telecom revenue alone. The demand logic was different too — Jio priced to build scale first, crossing 100 million subscribers within its first few months.

What looked like a price war was really a business model collision. The incumbents’ responses failed because they were fighting a structurally different machine with the logic of their own — and within two years, their average revenue per user had collapsed, and one of them had exited the market entirely.

IndiGo: when strategy is the entire competitive battle

When IndiGo entered India’s aviation market in the mid-2000s, it wasn’t competing by offering discounts, promotions, or loyalty plans. It wasn’t competing on tactics at all. The rivalry played out at the strategy level.

IndiGo asked who it wanted to serve, what job it needed to do, and how it could do that better than others — and answered with a single value proposition: on-time performance, for people traveling for work who wanted reliability over frills. Every choice it made was built around that one promise: a single aircraft type to keep turnarounds fast and predictable, fewer airports to reduce points of delay, all-economy seating to speed up boarding, and sale-and-leaseback financing to keep expansion fast without debt slowing it down.

Jet Airways and Kingfisher were solving a different problem entirely — wider networks, mixed fleets, premium cabins, aggressive long-haul bets. Nothing in their model was built around reliability the way IndiGo’s was. When the 2008 fuel price spike hit, their machines cracked; IndiGo’s stayed close to break-even, because every part of it had been built to run lean and on time in the first place.

It expanded quickly each time a rival stumbled — after Kingfisher collapsed in 2012, after Jet Airways failed in 2019 — and became India’s largest airline by market share within six years of starting operations.

Maruti vs. Tata Nano: when tactics worked

Maruti already had the Alto — its entry-level workhorse since 2000. When Tata Nano was announced in January 2008 as the world’s cheapest car, aiming to pull first-time buyers away from entry-level hatchbacks, Alto’s volumes briefly dipped. Then production got delayed: the Singur plant ran into land acquisition protests, and Tata had to relocate the entire factory to Sanand, Gujarat, pushing Nano’s actual launch back to 2009.

Maruti’s response wasn’t to build a new car. It was to push harder on the one it already had. It didn’t change anything about how it operated — it still had the Alto, its dealer reach, its service network, and years of brand trust already in place. It simply pushed harder on that existing machine: discounts, financing schemes, and aggressive offers on the Alto, timed to win over buyers before Nano could even arrive.

That’s the signature of tactics: nothing structural changes, you just push harder on the machine you’ve already built.