Strategic Direction Overview

The section contains an overview of the following strategic direction options:

Strategic Direction

For detailed information, see the Strategic Direction stage. This contains instructions to:

  • Prioritise a strategic direction - You may pick a mix of these or focus on one if it is important enough. By prioritising, you can avoid wasted effort. For example, if you have very high levels of customer churn, it will be unwise to look for new product opportunities.

  • Inputs into your strategy - Additional information and strategy input tools are available.

Overview of strategic direction

Mandatory work

This can include work that your organisation needs and that your clients need. For example, your customers need to show that they are GDPR compliant.

  • Keep the lights on - Essential change to ensure business continuity.

  • Legal, regulatory and compliance work - Adherence to standards.

Reduce costs

  • Remain competitive - Prevent lower prices from competitors from impacting business viability.

  • Increase profitability - Increase profit margin from improved efficiencies.

This includes cost avoidance. These are costs that are expected or likely in the future. For example, as you get more customers, you may need to create a support team based on current manual processes.

Reduce sales loss & churn

Reducing sales loss and churn also applies to major future risks. For example, a competitor is about to release a new version of their product that is significantly improved. This applies to customers who meet your Ideal Customer Profile (ICP) definition.

  • Churn - Minimise the loss of existing customers:

    • Who go back to no solution or their previous custom solution.

    • Who leave you for a competitor.

  • Sales loss - Address factors that cause you to lose:

    • To competitors.

    • Who don’t purchase any product.

Increase market share

Increase your market share with your current product and Ideal Customer Persona (ICP).

  • Identify unmet needs - Where customers are struggling (pains) or new ideas for creating delight (gains).

  • Strengthen differentiation - This is particularly important where you have a strategic focus to be differentiated.

  • Reach new adopters - Win new customers who are new to your type of solution.

  • Target weak competitors - Attack strengths and highlight weaknesses.

  • Create barriers to entry - Make it harder for new competition and put your existing competition under pressure.

  • Improve your business model - For example, using new customer awareness channels.

  • Remove barriers to expansion - For example, capacity limitations with internal team processes. Assessing this after you have prioritised your strategy is strongly recommended to see if you will have new bottlenecks based on your expected growth.

New markets/products

There are three options, as shown below on the Ansoff Matrix:

Market development - You will change your Ideal Customer Profile (ICP). Reduce risk by finding new customers that are the same or very similar to existing ones. For example, being in a different country. This strategy can be significantly lower risk than expanding a product.

Product development:

Costs can be lowered by reusing your current business model. For example, using your existing distribution channels. Most importantly, ensure any new product solves a big enough problem for the customer. These are your new product options:

  • New product - Reduce risk by releasing similar products to those you know. For example, if you have a product that monitors and improves data quality for universities, perhaps you could create another product for schools.

  • New product type - If you are responding to a new type of product, you can utilise your existing customer relationships to gain a competitive advantage. For example, if your industry is being disrupted by AI, you could create a similar product and directly sell it to your existing customers.

  • Extending your product - You may be extending your product to create a more end-to-end solution for customers. Here is an example using a university customer journey. You extend to cater for Alumni services, perhaps convincing ex-students to come back and study more.

  • Paid features - In this case, we have evaluated a university customer journey stage and determined that we can gain a competitive advantage by offering a comparison tool. Perhaps we could charge universities a small finder’s fee for successful recommendations.

Diversification - This can be a high-risk strategy. Use the market development and product development risk reduction strategies together.