Six Factors For Tech Vendors To Consider When Planning A New Market Strategy
By: Christopher Andrews (Sr. Analyst, Forrester Research)

Preparing a comprehensive strategy for entering new markets is a balancing act for many technology vendors. Take too much time in the planning process and your organization is likely to miss market opportunities and lose ground to faster-moving competition. On the other hand, aggressively moving into new markets without a well-defined plan and a complete understanding of market dynamics can be far more costly than any planning process. So to get it right the first time, Forrester has outlined six steps for strategy professionals to make sure the fundamentals are covered for effective planning process and presentation focus.

Six elements will guide your presentation:
At Forrester, we believe that several companies underestimate the value of creating strategy overview presentations that are complete and that rely on a minimal number of unchecked assumptions. As you prepare your presentation materials, make sure you have addressed these six fundamentals:

1. Create a compelling vision. Your strategy is less likely to succeed if you can’t build a coalition of support around it, so effective communication matters. Begin your presentation by introducing your vision, including your desired end state, key objectives, and (if applicable) your company’s value proposition in the marketplace. Make sure you have not made assumptions about market definitions — or assumed that your audience knows market boundaries. Creating this vision from the outset will align stakeholders around your goals, eliminate confusion and distractions from adjacent opportunities, and will ultimately dictate your resource requirements.
2. Identify how your resources support the strategy. Companies often fail to recognize the full depth and breadth of their resources or how they can apply their unique resources to support the vision. You need to evaluate physical resources, human resources, and intellectual property during strategic planning so that you can leverage the best of these resources and mitigate the weaknesses. Use frameworks like the SWOT analysis to see whether you have an opportunity to create a competitive advantage in the market by doing something that existing competitors cannot. Identifying potential weaknesses and threats will also lead to a more credible scenario-based plan that demonstrates that you’ve covered all the bases.
3. Use market trends to develop a story. Knowing that there is a market opportunity for your strategy — and providing the right data points to prove it — will go a long way toward selling your plan. A plan that builds a story around macro-level trends, market size, growth, competition, and customer needs will be difficult for your audience to ignore, even if they are not sold on the exact details of your execution plans. Where market information is lacking or unavailable, consider how primary research (such as interviews, surveys, and case studies) can help build the story and show that your plan is defensible. Many technology vendor strategies are R&D-led and are built upon assumptions that are often not validated.
4. Establish the business case. None of the other steps will help your audience evaluate the completeness of your plan as much as a strong business case. Start by gathering input from strategy stakeholders; this will help you develop an understanding of business requirements and understand where your organization has resource gaps. Develop a plan for filling the gaps and assigning the major costs and projected benefits over the time frame of the strategy. Then, using your timeline as a guide, pull together a business case for the strategy that includes financial metrics — typically return on investment (ROI) or discounted cash flows (DCFs). While creating accurate financial models during the early phases of strategic planning is never an exact science, it will help you and your stakeholders check preliminary cost/benefit implications and identify resource requirements at a more tactical level.
5. Select and motivate the right people. Perhaps the most important, and overlooked aspect of strategic planning is the formation of the execution team. While companies often think of an execution team as only the leaders of the strategy, you need a more comprehensive view of human resource requirements. For example, you’ll want to provide an understanding of how senior leadership supports the plan, what governance plan is in place to support the implementation, and how incentives to field professionals (like sales and marketing professionals) will support the execution.
6. Identify and mitigate primary risks. Every strategy has risks, and your audience wants to know that you have considered them. A strategic plan has the fundamental objective of driving change, but this is more likely to happen if the associated risks — as well as the risks of not changing — are well considered. By identifying what you believe will be the strategy’s most relevant risks and showing how your company can address them, you will highlight how well-thought-out and flexible your strategy really is.

Your planning process will change depending on whether you are focusing on market expansion, new market entry, acquisitions, innovation, or market exit. However, covering these fundamentals in your planning process will go a long way toward ensuring that your plan is a success. Once you have properly addressed each of these elements, you can begin to assess what additional information you require to make the strategic plan complete.

At Forrester, Chris provides Vendor Strategy professionals the tools and insights needed to support their go-to-market decisions. His research focuses on the strategies of IT service providers covering topics related to market positioning, sales, and partnering strategies. In addition, Chris helps strategy professionals understand the market for sources of funding, including the technology-focused interests of venture capital and private equity investors.

Write in your thoughts and feedback to Chris at: incomment@forrester.com