When it comes to building a successful strategy, start with clarity around your mission and vision. Your mission is why your company exists today, while the vision defines where you aim to go. With a clear purpose as your anchor, you can develop a strategic plan that’s both focused and actionable.
To structure your strategy, let’s leverage the classic five W’s—Who, What, Where, When, and How—to define both internal and external focus areas for your organization.
Who: Defining Your Market and Team
External – Identify Your Target Market:
Your “Who” outside of the company is the target market you want to serve. For a small business, it’s essential to define this narrowly. A tightly defined market allows you to focus resources, customize your product, and build a brand that resonates strongly with a specific audience.
Use the TAM (Total Addressable Market), SAM (Serviceable Available Market), and SOM (Serviceable Obtainable Market) framework to visualize your opportunity:
- TAM is your entire potential market. You do this to make sure you are building your company is a market that can grow.
- SAM is the market segment within reach. This is where strategic choices are critical. Will you grow geographically, psychographically or?
- SOM is the specific market you can realistically capture now. This is also a key strategic choice, as these are the people who will prove or disprove your product-market fit.
Internal – Build Your Ideal Team:
The internal “Who” includes the people in your organization. Many companies aim to only hire “A players,” but that isn’t always realistic, especially with a tight labor market. A strategic hiring approach can include different philosophies that match your situation, like Netflix’s approach to only hiring “grown-ups” or a “Moneyball” approach, seeking talent with undervalued skills that match your company’s needs.
What: Key Competencies and Market Offerings
External – Define Your Offering and Value Proposition:
What problem or opportunity are you addressing for your target market? Clearly define the specific need you’ll meet and the value you’ll provide. The more sharply you can articulate this, the better you’ll resonate with potential customers.
Internal – Develop Core Competencies:
Identify the key competencies your company must master to deliver on its mission. Decide what functions are crucial to retain in-house, where you might partner, and which tasks can be outsourced. Knowing which competencies to build versus buy is essential to focus your resources where they’re most impactful.
Where: Focus Your Market Landscape
External – Geographical and Psychographic Targeting:
Where will you focus your efforts? Traditional geography is one lens, but consider psychographic or behavioral segmentation too. This allows you to define your audience not only by location but by interests, lifestyles, and decision-making patterns, creating a “mental landscape” of where your market is.
Internal – Structure and Culture:
Within your organization, decide on your structural approach. Will you be hierarchical or flat? Maybe you’ll consider a holocratic structure. Whatever you choose, define your culture and values to foster a supportive environment for your team and to attract talent that aligns with your mission.
How: Differentiation and Operational Strategy
External – Achieve Differentiation Using the “7 Powers”:
Differentiation is how you stand out in a competitive market. According to the “7 Powers” framework, there are various sources of power to build your market position, such as:
- Scale Economies
- Network Effects
- Counter-positioning
- Switching Costs
- Branding
- Cornered Resource
- Process Power
Choose the power that best aligns with your strengths and market. Sometimes, instead of seeking novelty, a low-price strategy or a high-style premium can help you effectively capture your segment.
Internal – Optimize Internal Processes:
How will you run your company? Consider whether your organizational model supports your goals. Also, think about retention strategies and how to continuously engage and develop top talent to sustain growth and innovation.
When: Timing Your Moves
External – Timing Your Market Entry:
Understanding the right time to offer your value proposition is critical. Many startups launch too early and struggle to find sufficient traction, so balance ambition with market readiness. Timing is as important as the product itself for securing a market foothold.
Internal – Strategic Milestones:
When should you bring in an experienced CEO? When do you move from part-time resources, like a CFO, to full-time executives? Strategic timing decisions apply internally as well, allowing you to scale resources when needed and avoid inefficiencies.
By walking through each of these questions, you’ll begin to see a cohesive strategy emerge. A strategic framework built on the five W’s creates a comprehensive, interconnected vision that aligns with both the market landscape and your internal capabilities. Whether you’re defining the market, refining processes, or planning for growth, these guiding questions will help shape a strategic approach that positions your business for sustainable success.