Bold steps based on firm footing
Launching a brand new business unit is an exciting and daunting prospect for any organization.
Our client had an idea for a connected device that might be the first step toward a larger, integrated monitoring system in their well-established portable equipment business units. But they needed help to focus on how to implement and capitalize on the offering.
Our program with them involved an intense look at all of the possible combinations of deriving revenue from hardware, software and data generation. Which players might be involved – homeowner, contractor, distributor, online retailer?
Right off the bat, Design Concepts’ business strategists were able to provide a framework within which to evaluate the variables. The client had been spinning their wheels for months, going down one rabbit hole after another, which always ended with decision paralysis. Our framework allowed them to take that critical step back, focus on the variables, forget the extraneous noise of the details, and ultimately resulted in a focused evaluation of a small subset of combinations. A fishbone diagram was the perfect tool for this point in the process. Coupled with a healthy list of pros and cons, it gave the project team plenty to discuss and evaluate.
With some variables decided, we dove into some preliminary business modeling to further evaluate the various revenue schemes. There is a business modeling sweet spot in between back-of-envelope guestimates and fully developed set of discounted cash flows that provides a balance of robustness and efficiency for this phase of strategic decision-making. Hitting that sweet spot would give us enough info to intelligently evaluate while avoiding wasting time with complex assumptions about future cash flows to build into an extensive model.
In this case, our client might have had a win on their hands regardless of the direction. But with the help of our business strategists, the client was able to properly vet the opportunities to find the biggest win and the best fit for their organization to implement.
The client’s management team has taken prudent, measured steps along the uncertain path of launching a new product in an entirely new space to them. In the end, they moved forward with a very calculated next step that came out of our co-analysis and refinement of the strategic options we developed for them.
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