In the chaotic jungle of business intuition might get you by for a while, but what about building a systematic approach to dissect situations, identify opportunities, and ultimately, chart a winning course for your product and company?
Enter the business analysis models. These frameworks, far from being dry academic exercises, are your secret weapons. They allow you to deconstruct complex situations into manageable chunks, identify hidden patterns, and ultimately, make data-driven decisions that propel your product forward.
Models are like maps: they are not the reality, they represent reality. And just like maps, the best models help us see not where we are, but where we could go. They are less about static pictures and more about dynamic possibilities.
Let's delve into four particularly potent models, each offering a unique lens for analysing your business situation:
SWOT Analysis:
This is a classic framework that helps you assess your company's Strengths, Weaknesses, Opportunities, and Threats (SWOT). Examining these internal and external factors allows you to spot areas for improvement and capitalize on market openings.
Strengths and Weaknesses: These are internal factors. Strengths could include a strong brand, proprietary technology, or an experienced team. Weaknesses might be areas like limited resources, outdated processes, or gaps in expertise.
Opportunities and Threats: These are external factors. Opportunities could be emerging markets, regulatory changes, or shifts in consumer behaviour that a business could capitalize on. Threats might include new competitors, economic downturns, or technological obsolescence.
Now, let’s talk about how we could instruct a generative AI to execute the SWOT model on a given example. The prompt might look something like this:
Given a SaaS company specializing in [project management tools], with a strong [user interface] and a [growing remote work customer base] but lacking in [integrations and facing new low-cost competitors], perform a SWOT analysis to identify strategic actions for market dominance.
Why does the SWOT model endure in its usefulness? Because it forces us to confront the realities of our business environment, both good and bad, and to do so with a critical eye. It’s not just about listing items in four categories; it’s about understanding the interplay between them and how they can inform our strategy.
Porter’s Five Forces: Understanding the Competitive Dynamics
Developed by Michael E. Porter, this model is a robust framework for analyzing the competitive forces that shape every industry, and by extension, the businesses within it.
For a Product Manager or Leader, understanding these forces helps in crafting strategies that can either exploit certain forces or defend against them. Let’s take an example of a company that develops AI-powered customer service chatbots.
Competitive Rivalry: The market is saturated with similar offerings, which means the company must differentiate its product through advanced features or superior customer service.
Supplier Power: The company relies on cloud services from a few large providers, giving these suppliers significant power over pricing.
Buyer Power: As the product serves a critical business function, buyers have less power to negotiate, unless they are large enterprises that purchase at scale.
Threat of Substitution: There is a constant threat from new technologies that could make chatbots obsolete, such as advanced AI personal assistants.
Threat of New Entry: The barriers to entry are moderate, as developing a sophisticated chatbot requires specialized knowledge and technology.
To engage an AI in executing Porter’s Five Forces on this example, a Product Manager might use a prompt like:
Perform full Porter's Five Force model analysis for a company that develops [AI-powered customer service chatbots], considering the market saturation, reliance on cloud service providers, the critical nature of the product for businesses, emerging AI technologies, and the barriers to entry for new competitors.
Actionable Learnings: Once you've identified these forces, think strategically. Can you build barriers to entry for new competitors? Can you develop stronger relationships with suppliers? Analyze Porter's model with brutal honesty, and use your findings to carve out a sustainable competitive advantage for your product.
Lean Canvas model
Finaly, we arrive at a tool that is one-page business plan template that helps deconstruct idea into key assumptions. It’s adapted from the Business Model Canvas and is optimized for startups and SaaS businesses.
The Lean Canvas focuses on addressing broad customer problems and solutions and is designed to be an actionable and entrepreneur-focused business plan. It zeros in on startup factors like uncertainty and risk.
Here’s a brief overview of the Lean Canvas sections:
- Problem: List the top problems your SaaS product is addressing.
- Customer Segments: Define the target customers and users for your product.
- Unique Value Proposition: Clarify your product’s promise that sets it apart from the competition.
- Solution: Outline the possible solutions for the problems listed.
- Channels: Determine the paths to reach customers and deliver the product.
- Revenue Streams: Identify how your company will make money from your product.
- Cost Structure: Understand the costs involved in running the business.
- Key Metrics: Figure out the indicators of success for your product.
- Unfair Advantage: Describe what can’t be easily copied or bought by competitors.
Create a Lean Canvas for a SaaS company offering [project management tools], focusing on the main challenges in team collaboration, targeting small to medium-sized businesses, with a unique value proposition of AI-powered automation features, delivered through direct online sales and partner channels, with a subscription-based revenue model.
The Lean Canvas is not just a document; it’s a guide that reflects the business’s current reality and can evolve with the company’s growth and learning. It’s a living framework that encourages continuous refinement and clarity, making it a very practical choice for SaaS companies aiming for agility and precision in their business strategy.
Bonus Model: The Value Proposition Canvas
While the previous models provided a broad perspective, the Value Proposition Canvas helps your laser-focus on your ideal customer and craft a compelling reason for them to choose your SaaS product.
Here's an expanded generative AI prompt that allows users to input specific information for their Value Proposition Canvas within the prompt itself:
Based on the following information, create a Value Proposition Canvas for a SaaS solution targeting [Target Customer] (e.g., marketing teams, small businesses in the hospitality industry):
Customer Jobs: Briefly describe the key tasks or problems your ideal customers are trying to solve (e.g., managing social media campaigns, streamlining the booking process for hotels).
Customer Pain Points: List the specific frustrations and challenges they encounter in accomplishing these jobs (e.g., difficulty scheduling social media posts across platforms, inefficient communication with guests during the booking process).
Customer Gains: Outline the desired outcomes and benefits your target customers seek (e.g., increased brand awareness on social media, improved guest satisfaction and conversion rates).
For the Value Proposition section, consider the following details:
Your SaaS Products & Services: Describe the core features and functionalities your SaaS offers (e.g., a social media scheduling tool with analytics, a booking management system with automated guest communication features).
Addressing Customer Pains: Explain how your product directly addresses the customer's listed pain points (e.g., your scheduling tool simplifies content management across platforms, your booking system automates email confirmations and pre-arrival messages).
Delivering Customer Gains: Highlight how your product helps them achieve their desired gains and benefits (e.g., your tool fosters consistent brand messaging on social media, ultimately leading to increased brand awareness, your booking system streamlines communication and reduces friction, resulting in higher guest satisfaction and increased conversion rates).
Going Beyond the Template
Now, go beyond a basic feature list and craft a memorable value proposition that resonates with their ideal customer.
Imagine you're a well-trained marketer for a new SaaS product. Your target audience is [Target Customer] (e.g., Product Manager, solopreneurs in the fitness industry). You know they struggle with [Customer Pain Points] (e.g., creating engaging content consistently, managing client communication across multiple channels).
Now, craft a compelling value proposition using the Value Proposition Canvas. Here's a twist: Instead of just describing your product's features, focus on how it would be personified by a superhero.
- What kind of superhero would your product be?
- What are their superpowers (i.e., product features)?
- How do these superpowers directly address your target customer's pain points and deliver their desired gains?
These are just a taste of the many potent business analysis models at your disposal. By mastering these frameworks, you'll transform from a reactive product leader to a strategic mastermind.
Peter Senge, Author of "The Fifth Discipline" encourage us to embrace the model mindset:
In a world of chaos, the ability to frame the situation, to see the patterns and relationships, is a critical skill. It is the skill that allows us to test hypotheses, to understand the consequences of actions, to make sound decisions, and ultimately, to create the future we want.
Let these models be your compass, guiding you through the labyrinthine world of business. With a keen understanding of your situation and a strategic mindset, you can unlock the true potential of your product and navigate your way to success. So, what are you waiting for? Start hacking the maze today!
Got feedback or ideas? Drop a note – it’s super easy and I’d love to hear from you!
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