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Strategy Questions

This section covers frameworks and worked examples for strategy interview questions. For foundational concepts, see the Product Strategy page.

Strategy Question Types

TypeExampleAssessment 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

StepFocusKey Questions
1. Company AnalysisGoals and strengthsWhat are core capabilities? What is the strategic direction?
2. Market AnalysisSize and dynamicsHow big? How competitive? What is changing?
3. Strategic FitAlignment assessmentDoes this make sense for this company specifically?
4. Option EvaluationBuild vs. buy vs. partnerWhat is the best entry approach?
5. RecommendationDecision with rationaleWhat is the call? What are the risks?

Worked Example: Should Google Enter Healthcare?

Step 1: Company Analysis

FactorAssessment
MissionOrganize the world's information and make it universally accessible
StrengthsAI/ML, data infrastructure, search, user base scale
WeaknessesPrivacy concerns, B2C services beyond advertising
Existing effortsGoogle 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

MetricValue
US healthcare spending$4.3 trillion/year
Healthcare IT market$200B, growing 15%/year
Digital health market$150B, growing 25%/year

Competitive landscape:

PlayerPositionStrengths
Epic Systems35% hospital EHR marketDeep integration, switching costs
MicrosoftAzure healthcare cloudEnterprise relationships
AmazonAWS healthcare, pharmacyLogistics, consumer trust
AppleHealth records, WatchConsumer devices, privacy brand

Market dynamics:

FactorAssessment
Barriers to entryHigh (HIPAA, FDA, 3-5 year sales cycles, trust requirements)
Buyer powerModerate (hospital consolidation, but cost pressure creates opportunity)
SubstitutesLow (healthcare cannot be outsourced easily)
GrowthHigh (aging population, chronic disease, COVID digital acceleration)

Step 3: Strategic Fit Assessment

CriterionAssessmentScore (1-5)
Mission alignmentHealth data is valuable information4
Core strength utilizationAI/ML highly applicable5
AdjacencySome Fitbit/Verily work3
Financial attractivenessHigh margin potential4
Risk profileHigh regulatory risk2

Overall strategic fit: 3.6/5 (Moderate-High)

Step 4: Option Evaluation

OptionProsConsAssessment
Build organicallyFull control, IP ownershipSlow, healthcare talent gapNot recommended
AcquireSpeed, instant expertiseExpensive, integration riskConsider for key capabilities
PartnerLower risk, gain expertiseSlower, shared economicsStart here
Licensing/PlatformScalable, uses AI strengthLess direct revenueLong-term play

Segment analysis:

SegmentAttractivenessGoogle FitRecommendation
Consumer health appsHigh growth, crowdedStrong (Fitbit)Enter
Hospital IT systemsLarge, stickyWeakDo not enter
Clinical AI toolsGrowing, high marginStrong (AI)Enter
Pharmaceutical R&DHigh valueModeratePartner
Insurance/payersLargeWeakDo not enter

Step 5: Recommendation

Recommendation: Enter healthcare with narrow focus on AI-powered clinical tools and consumer health.

Rationale:

  1. Market opportunity is $4T+ with accelerating digital adoption
  2. Strategic fit with AI/ML capabilities and consumer reach
  3. Competitive advantage in data processing and pattern recognition
  4. Synergy with Fitbit and Verily investments

Where not to play: Hospital IT systems (Epic entrenchment), insurance/payers (no natural advantage)

Execution timeline:

PhaseTimeframeFocus
Short-termYear 1Expand Fitbit health features, launch clinical AI research partnerships
Medium-termYears 2-3Offer AI diagnostic tools to hospitals (imaging focus)
Long-termYears 5+Build health data platform connecting consumers, providers, payers

Risk mitigation:

RiskLikelihoodMitigation
Privacy backlashHighSeparate health data from ads, HIPAA-only cloud
Regulatory delaysHighPartner with established healthcare companies
Antitrust scrutinyMediumAvoid 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

FactorAssessment
Population20M+ in metro area
Existing transportAuto-rickshaws, taxis (Ola), trains
Smartphone penetration45% and growing
Traffic conditionsSevere congestion
Price sensitivityVery high

Launch Strategy

Phase 1: Market Entry (Months 1-3)

ElementApproach
Geographic focusBusiness districts (BKC, Lower Parel)
Driver acquisitionPartner with existing taxi fleets
PricingBelow auto-rickshaw rates for first month
MarketingCorporate partnerships, airport presence

Phase 2: Expansion (Months 4-6)

ElementApproach
Geographic expansionSuburbs (Andheri, Thane)
Product expansionLaunch UberAuto (auto-rickshaw option)
Trust buildingSafety features, cash payment option

Phase 3: Scale (Months 7-12)

ElementApproach
Product expansionUberMoto (motorcycles), UberPool
Network effectsDriver referral bonuses, rider loyalty
Competitive responseMatch Ola pricing, differentiate on reliability

Critical Success Factors

FactorImportanceNotes
Cash paymentsCriticalMost transactions are cash-based
Auto-rickshaw inclusionCriticalPrimary transport mode
Safety for womenHighAdoption driver, differentiation opportunity
Local partnershipsHighPayments (Paytm), maps (local data)

Quick Reference: Frameworks

Porter's Five Forces

ForceAssessment Question
Industry rivalryHow intense is competition?
New entrant threatHow easy to enter this market?
Substitute threatWhat alternatives exist?
Buyer powerCan customers squeeze margins?
Supplier powerAre you dependent on key suppliers?

SWOT Analysis

CategoryFocus
StrengthsInternal capabilities
WeaknessesInternal limitations
OpportunitiesExternal market gaps
ThreatsExternal risks

3Cs Framework

CQuestions
CompanyWhat are our capabilities? What is our right to win?
CustomersWho are they? What do they need? Are they underserved?
CompetitionWho serves them? Where are competitors weak?

Question Bank

Market Entry

QuestionKey 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

QuestionKey Considerations
Competitor launched feature XCopy vs. differentiate vs. ignore
New entrant disrupting marketThreat reality assessment, unfair advantages
Price war initiatedCan you compete on price? Alternatives?

Portfolio Decisions

QuestionKey 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

CharacteristicDemonstration
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

  1. Should Spotify launch a podcast-only subscription tier?
  2. How would Instagram respond if TikTok launched Instagram-like features?
  3. Should Microsoft acquire Discord?
  4. How would you launch a food delivery service in a new country?
  5. What should Twitter's strategy be to compete with LinkedIn for professional networking?