Situation: A CEO is faced with three strategic options that the company could pursue. He seeks guidance on how the company should evaluate the three options. What signs should they be watching for in their marketplace? Are there steps that they should take while completing their evaluation? How do you decide between strategic options?
Advice from the CEOs:
- Go with what sells! Listen to the market, and your key customers. Make sure that you have ears out there that will give you early signals.
- Until there is a clear indication from the market place as to which is the stronger strategy, keep your options open. A hybrid strategy – maintaining your current strategy while evaluating the strongest strategic option – will allow you to do this and continue to drive revenue from your existing base while the market determines dominance among the new platforms.
- Look at the cash flow from your current strategy and each of the new options that you are considering.
- What difference is there in upfront payments versus ongoing residuals?
- Look closely at your cash flow needs compared to the timing of receipts from each option.
- Are there ways that you can strengthen your cash flow depending upon which strategy you select? How will you bridge the gap between current and future cash flows from each strategic option?
- Consider hiring a full-time manager in business development.
- This will help you to learn more about your customers and what they will buy.
- Select someone who has relationships with the key people in your target markets, and who knows what the insiders are doing at important existing or target customers.
- Select someone who can give you access to new opportunities and help steer your strategic development.
- Consider a long-term strategic partnership with a leader in your market.