By Paul Wiefels, managing director & co-founder of Chasm Group, LLC
For many enterprises, the coming fall season brings with it the start of the planning season for every function in the enterprise. Creating a market strategy typically culminates in sales kick-offs and company-wide get-togethers where the plan is unveiled, and it is hoped, bought into, and celebrated.
Getting there requires both work and making choices. There are myriad approaches to strategic planning. At one end of the spectrum—laborious, uninspiring slogs through reams of data, third-party research, and number-crunching. On the other, the journey to a promised land is based on equal parts rosy optimism and magical thinking.
We believe the best plans are those that are fact-based, prescriptive, aspirational, and realistic, based on input and buy-in across the functions of an organization. They include both a descriptive intent that considers the forces that will affect the desired outcome; as well as a prescriptive intent which develops and positions these forces to achieve the desired outcome. Strategy should always be created relative to an overall strategic intent. Declaring intent helps identify the forces, issues, and challenges that matter and ensures that prescriptions enable outcomes that matter. Considering these elements first—before you start developing hypotheses concerning your target customers, your value offer, how to price that value, competitive alternatives, positioning, and so on—can be the first test for company-wide alignment crucial to resource allocation, execution, and choosing appropriate metrics.
To begin the process, there are three fundamental dimensions to consider: questions that should be asked before the start of any market strategy exercise even if you may think the answers are obvious. Given the dynamics of modern markets, answers can and will change.
The first is, “Where should we compete?” This typically includes an analysis of existing and emerging markets, market size and CAGR; unserved customer needs, emerging opportunities, and investment “themes;” potential profit streams, competitive intensity, risks, and exigencies, and so on, leading to a choice of where and where not to compete, and why.
The second is, “How should we compete?” Factors here include what to offer and how to offer it; how to differentiate it; the underlying and sustainable sources of competitive advantage; the sources of innovation; and barriers to competitive entry and customer exit.
The third question, and the one most overlooked in our experience, “How will we win?” This dimension considers your business and market model; the resources required not just to play but to prevail; the ability to execute successfully including making tough decisions that result in “tipping points;” and so on. The answers to this question translate to an organization’s ability to systematically allocate resources to maximize a competitive advantage relative to a particular goal or intention. This, in turn, enables a more focused approach to the granular identification of for whom, why, and how. This is where the talk gets walked.
Finally, the test of all three dimensions, but particularly the third, includes two further checkpoints: “What must be true for each component of the market strategy?” and “What must we believe in order to maximize the chance for success?” Answers here are not found solely in data analysis nor should they be subject to wishful thinking. Rather, they determine the path you choose, and the nature of the journey ahead.