Strategy - Strategic Decision Business Case
Project Example | Nonprofit Strategy
Strategic decision business case
Context
My client faced an upcoming decision with large financial implications. Specifically, it needed to decide whether to make an additional unrestricted investment of more than $100,000 dollars to further develop a new revenue-generating initiative. Historically, decision making was made largely based on the consensus intuition of the executive team, but my client wanted a more rigorous decision making process.
Key Question
Should we commit significant financial resources to the new initiative?
Solution
I determined the key factors to be considered in a decision to commit resources to a new revenue-generating initiative, structured and conducted analysis, and recommended investment in the new initiative. Activities included:
- Structuring of the questions required to rigorously evaluate the merit of an investment request.
- Assessment of the initiative in question.
- Preparation of the business case.
- Delivery of a recommendation to executives.
The key to success in this process was the use of a strong structure to guide assessment of the initiative. To secure approval, the business case had to make a convincing argument in response to these key questions:
- Desirability: Are we targeting an urgent gap in the market?
- Are we targeting an urgent job-to-be-done experienced by a large number of customers?
- Will our solution solve that problem?
- Do we have a compelling value proposition?
- Will our solution have compelling social impact?
- Feasibility: Are we well-positioned to succeed?
- Do we have the capabilities required to deliver the value proposition? Can we build, borrow or buy any new capabilities we need?
- Are dynamics in the target market conducive to our entry (considering, for example, competition, switching costs, minimum efficient scale, and sales channels)?
- Viability: Is our conclusion supported by reasonable unit economics and scale assumptions?
- Will the model offer viable unit economics (considering, for example, price, gross margin, customer lifetime value and customer acquisition cost)?
- Are the growth rates and scale required to meet our financial goals reasonable (considering, for example, market size, required market penetration, and Year 1 and subsequent growth rates)?
- What expansion opportunities exist?
Results
The executive team approved the business case, allocating more than $100,000 to the new revenue-generating initiative.
Want to learn more? I'd love to chat.
Let's Connect
Sign up to have nonprofit strategy resources delivered to your inbox.
