The strategic roadmap for a business evolves to align with customer needs and technology advancement. There are many variables to consider. It is a complex, yet manageable process to sieve through options.
A central idea to incorporate in the strategy development process is to evaluate and prioritize what you want to preserve, strengthen, and transform.
Preserve without getting in your own way
A cash cow today doesn’t guarantee future success. Customer preferences and expectations change constantly.
While it might seem logical to preserve what is performing well, getting stuck in past successes poses a dire risk to innovation. Competition increases as comparable products build their own fan base. Preservation without innovation is an unsustainable strategy. Preservation without innovation is an unsustainable strategy. Click To Tweet
In determining what to preserve, you need to have a good understanding of the market trends and the effects of the pace of change. They impact your plan on what to preserve and how much effort to invest.
Recognizing that there is an eventual expiry for the cash cow, preservation needs to be looked at with a time window in mind.
Beyond that time window, you need a plan to transition to the replacement product(s) to avoid delaying the opportunities to innovate, compromising future success.
Work the numbers to evaluate the projected impacts. It is a balance between preserving current success with acceptable revenue cannibalization and risks associated with taking a leap.
Strengthen without compromising core competencies
Results and customer feedback provide validation of your product offerings. Opportunities to strengthen your competitiveness deserve attention.
Does the software you sell require additional features? Is it timely to invest in a bigger warehouse and expand capacity now?
The level of investment necessary to strengthen the current products and services varies. The returns on investment and opportunity costs also differ.
In adding new software features, it might be a straightforward enhancement undertaking to incorporate customer requests, boosting the productivity of their employees.
To invest in a bigger warehouse, there are more factors to consider. The higher fixed cost demands more revenue to offset the additional spend. The payback period would be longer as a result.
A key factor to consider is whether what you choose to strengthen would reinforce your core competencies. Core competencies are what you do really well. You want to invest in areas that facilitate further enhancement.
Knee-jerk reactions, particularly the shiny objects that tend to have great appeal, could lead to misalignment.
Transform without conflicting with the mission of the business
Transformation is exciting and demanding. What works well for your competition might not be rational for your business.
Revisit your mission. Have a clear understanding what it stands for.
In determining what to transform and how to do so, the anticipated outcomes need to align with your business mission.
If your mission is to help customers improve productivity, would incorporating augmented reality technology in your training software tool align with the mission? Augmented reality introduces a new level of learning experience. The transformation aligns with your mission.
On the contrary, would switching to an outsourcing model for contract drivers align with the mission to serve with environmentally friendly solutions? The transformed business model for the logistics business brings significant cost reduction. It also adds limitless service capacity with little fixed cost.
However, the switch doesn’t allow the business to have much influence on the outsourced fleet. Drivers won’t be wearing uniforms. The vehicles are not necessarily hybrid vehicles. The misalignment with the environmentally friendly solutions mission conveys confusing messages.
For the logistics business, it might be better to revise the mission. Otherwise, customer could feel alienated and defect as a result.
Attaining growth requires discipline. By making a conscious effort to align your strategic moves with a clear big picture, you would be able to decipher what to preserve, strengthen, and transform, reaching a coherent roadmap.