Strategy Questions
This section covers frameworks and worked examples for strategy interview questions. For foundational concepts, see the Product Strategy page.
Strategy Question Types
| Type | Example | Assessment Focus |
|---|---|---|
| Market Entry | "Should Uber expand to India?" | Market analysis capability |
| Competitive Response | "TikTok is growing. What should Instagram do?" | Competitive dynamics understanding |
| Product Direction | "Should Netflix add games?" | Strategic fit evaluation |
| Launch Strategy | "How would you launch Uber in a new city?" | GTM and operations thinking |
| Investment Priority | "Choose 2 of 5 projects to fund" | Trade-off decision making |
Strategy Framework
| Step | Focus | Key Questions |
|---|---|---|
| 1. Company Analysis | Goals and strengths | What are core capabilities? What is the strategic direction? |
| 2. Market Analysis | Size and dynamics | How big? How competitive? What is changing? |
| 3. Strategic Fit | Alignment assessment | Does this make sense for this company specifically? |
| 4. Option Evaluation | Build vs. buy vs. partner | What is the best entry approach? |
| 5. Recommendation | Decision with rationale | What is the call? What are the risks? |
Worked Example: Should Google Enter Healthcare?
Step 1: Company Analysis
| Factor | Assessment |
|---|---|
| Mission | Organize the world's information and make it universally accessible |
| Strengths | AI/ML, data infrastructure, search, user base scale |
| Weaknesses | Privacy concerns, B2C services beyond advertising |
| Existing efforts | Google Health (dissolved), Verily, Fitbit acquisition |
Strategic goals:
- Diversify revenue beyond advertising
- Apply AI capabilities to new domains
- Enter high-margin industries
Step 2: Market Analysis
| Metric | Value |
|---|---|
| US healthcare spending | $4.3 trillion/year |
| Healthcare IT market | $200B, growing 15%/year |
| Digital health market | $150B, growing 25%/year |
Competitive landscape:
| Player | Position | Strengths |
|---|---|---|
| Epic Systems | 35% hospital EHR market | Deep integration, switching costs |
| Microsoft | Azure healthcare cloud | Enterprise relationships |
| Amazon | AWS healthcare, pharmacy | Logistics, consumer trust |
| Apple | Health records, Watch | Consumer devices, privacy brand |
Market dynamics:
| Factor | Assessment |
|---|---|
| Barriers to entry | High (HIPAA, FDA, 3-5 year sales cycles, trust requirements) |
| Buyer power | Moderate (hospital consolidation, but cost pressure creates opportunity) |
| Substitutes | Low (healthcare cannot be outsourced easily) |
| Growth | High (aging population, chronic disease, COVID digital acceleration) |
Step 3: Strategic Fit Assessment
| Criterion | Assessment | Score (1-5) |
|---|---|---|
| Mission alignment | Health data is valuable information | 4 |
| Core strength utilization | AI/ML highly applicable | 5 |
| Adjacency | Some Fitbit/Verily work | 3 |
| Financial attractiveness | High margin potential | 4 |
| Risk profile | High regulatory risk | 2 |
Overall strategic fit: 3.6/5 (Moderate-High)
Step 4: Option Evaluation
| Option | Pros | Cons | Assessment |
|---|---|---|---|
| Build organically | Full control, IP ownership | Slow, healthcare talent gap | Not recommended |
| Acquire | Speed, instant expertise | Expensive, integration risk | Consider for key capabilities |
| Partner | Lower risk, gain expertise | Slower, shared economics | Start here |
| Licensing/Platform | Scalable, uses AI strength | Less direct revenue | Long-term play |
Segment analysis:
| Segment | Attractiveness | Google Fit | Recommendation |
|---|---|---|---|
| Consumer health apps | High growth, crowded | Strong (Fitbit) | Enter |
| Hospital IT systems | Large, sticky | Weak | Do not enter |
| Clinical AI tools | Growing, high margin | Strong (AI) | Enter |
| Pharmaceutical R&D | High value | Moderate | Partner |
| Insurance/payers | Large | Weak | Do not enter |
Step 5: Recommendation
Recommendation: Enter healthcare with narrow focus on AI-powered clinical tools and consumer health.
Rationale:
- Market opportunity is $4T+ with accelerating digital adoption
- Strategic fit with AI/ML capabilities and consumer reach
- Competitive advantage in data processing and pattern recognition
- Synergy with Fitbit and Verily investments
Where not to play: Hospital IT systems (Epic entrenchment), insurance/payers (no natural advantage)
Execution timeline:
| Phase | Timeframe | Focus |
|---|---|---|
| Short-term | Year 1 | Expand Fitbit health features, launch clinical AI research partnerships |
| Medium-term | Years 2-3 | Offer AI diagnostic tools to hospitals (imaging focus) |
| Long-term | Years 5+ | Build health data platform connecting consumers, providers, payers |
Risk mitigation:
| Risk | Likelihood | Mitigation |
|---|---|---|
| Privacy backlash | High | Separate health data from ads, HIPAA-only cloud |
| Regulatory delays | High | Partner with established healthcare companies |
| Antitrust scrutiny | Medium | Avoid acquisitions of major players |
Success metrics:
- Year 1: 3 major health system partnerships
- Year 3: $1B health-related revenue
- Year 5: Top 3 clinical AI provider
Worked Example: Launch Uber in Mumbai
Market Analysis
| Factor | Assessment |
|---|---|
| Population | 20M+ in metro area |
| Existing transport | Auto-rickshaws, taxis (Ola), trains |
| Smartphone penetration | 45% and growing |
| Traffic conditions | Severe congestion |
| Price sensitivity | Very high |
Launch Strategy
Phase 1: Market Entry (Months 1-3)
| Element | Approach |
|---|---|
| Geographic focus | Business districts (BKC, Lower Parel) |
| Driver acquisition | Partner with existing taxi fleets |
| Pricing | Below auto-rickshaw rates for first month |
| Marketing | Corporate partnerships, airport presence |
Phase 2: Expansion (Months 4-6)
| Element | Approach |
|---|---|
| Geographic expansion | Suburbs (Andheri, Thane) |
| Product expansion | Launch UberAuto (auto-rickshaw option) |
| Trust building | Safety features, cash payment option |
Phase 3: Scale (Months 7-12)
| Element | Approach |
|---|---|
| Product expansion | UberMoto (motorcycles), UberPool |
| Network effects | Driver referral bonuses, rider loyalty |
| Competitive response | Match Ola pricing, differentiate on reliability |
Critical Success Factors
| Factor | Importance | Notes |
|---|---|---|
| Cash payments | Critical | Most transactions are cash-based |
| Auto-rickshaw inclusion | Critical | Primary transport mode |
| Safety for women | High | Adoption driver, differentiation opportunity |
| Local partnerships | High | Payments (Paytm), maps (local data) |
Quick Reference: Frameworks
Porter's Five Forces
| Force | Assessment Question |
|---|---|
| Industry rivalry | How intense is competition? |
| New entrant threat | How easy to enter this market? |
| Substitute threat | What alternatives exist? |
| Buyer power | Can customers squeeze margins? |
| Supplier power | Are you dependent on key suppliers? |
SWOT Analysis
| Category | Focus |
|---|---|
| Strengths | Internal capabilities |
| Weaknesses | Internal limitations |
| Opportunities | External market gaps |
| Threats | External risks |
3Cs Framework
| C | Questions |
|---|---|
| Company | What are our capabilities? What is our right to win? |
| Customers | Who are they? What do they need? Are they underserved? |
| Competition | Who serves them? Where are competitors weak? |
Question Bank
Market Entry
| Question | Key Considerations |
|---|---|
| Should Amazon enter banking? | Regulatory hurdles, trust, existing financial partnerships |
| Should Netflix expand to Africa? | Internet infrastructure, local content, price sensitivity |
| Should Apple make a car? | Manufacturing complexity, competitive landscape, brand fit |
Competitive Response
| Question | Key Considerations |
|---|---|
| Competitor launched feature X | Copy vs. differentiate vs. ignore |
| New entrant disrupting market | Threat reality assessment, unfair advantages |
| Price war initiated | Can you compete on price? Alternatives? |
Portfolio Decisions
| Question | Key Considerations |
|---|---|
| Which projects to prioritize? | Strategic alignment, resources, dependencies |
| Should we sunset this product? | Opportunity cost, user impact, revenue |
| Build vs. buy vs. partner? | Core competency, time-to-market, control |
Strong Response Characteristics
| Characteristic | Demonstration |
|---|---|
| Objective clarity | "Before analyzing, what is the primary goal: revenue growth, user acquisition, or defensive positioning?" |
| Trade-off acknowledgment | "The main tension here is between speed-to-market and maintaining quality" |
| Quantification | "The market is $10B. Capturing 5% in year 3 is $500M" |
| Second-order thinking | "If we enter this market, how might competitors respond?" |
| Clear position | "My recommendation is to enter, specifically targeting segment X first" |
| Risk transparency | "The main risk is regulatory. Mitigation approach is..." |
Practice Questions
- Should Spotify launch a podcast-only subscription tier?
- How would Instagram respond if TikTok launched Instagram-like features?
- Should Microsoft acquire Discord?
- How would you launch a food delivery service in a new country?
- What should Twitter's strategy be to compete with LinkedIn for professional networking?