go-to-market-strategy

What Is A Go-To-Market Strategy? Go-To-Market Strategy Examples

A go-to-market strategy represents how companies market their new products to reach target customers in a scalable and repeatable way. It starts with how new products/services get developed to how these organizations target potential customers (via sales and marketing models) to enable their value proposition to be delivered to create a competitive advantage.

What do you take into account in a go-to-market strategy?

When launching new products successfully there are a few elements to take into account:

Product Development

In today’s digital landscape, when it comes to digital products or physical products that have digital components, built-in growth features enable a successful go-to-market strategy.

For instance, frameworks like growth hacking; engineering, data analysis, and marketing come together to enable a successful product launch.

That’s because product features can switch on the viral growth engine, thus speeding up adoption. Companies like Dropbox, Slack, and Zoom know that pretty well.

Marketing, segmentation, and pricing

Other elements like market segmentation (where do we start? who do we target?), and pricing can be critical elements to build up momentum. For instance, Facebook started from specific niches, at selected campuses across the US, before opening up to anyone else.

Market context and distribution

A great product without proper distribution won’t go far, or too far. Distribution can be built in several ways. And based on the kind of product, you will structure your organization’s go-to-market strategy.

For instance, for the kind of product type and whether the market is ready or not for that, do you need a sales force able to deal with large enterprise customers? Or rather marketing power to push through a larger number of people?

For that, it will be extremely important to understand the market context:

market-types
A market type is a way a given group of consumers and producers interact, based on the context determined by the readiness of consumers to understand the product, the complexity of the product; how big is the existing market and how much it can potentially expand in the future.

And from there elaborate a growth/launch strategy:

growth-strategies
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).

In most cases, the market entry strategy can vary based on how crowded is the market, whether customers are used to the kind of product you’re offering, and perhaps if you’re offering something wholly new, either because its a whole new product or it has never been done in that geographic market.

market-entry-strategies
An entry strategy is a way an organization can access a market based on its structure. The entry strategy will highly depend on the definition of potential customers in that market and whether those are ready to get value from your potential offering. It alls starts by developing your smallest viable market.

Business model innovation, therefore, becomes a function of a much better product, or the ability to cut out fragmented intermediaries that extract value from the market. Or yet, by redesigning the whole customer value chain.

As new companies enter existing markets or create new ones, they tend to master a mixture of product, distribution and value innovation as a competitive advantage.

entry-strategies-startups
When entering the market, as a startup you can use different approaches. Some of them can be based on the product, distribution or value. A product approach, takes existing alternatives and it offers only the most valuable part of that product. A distribution approach, cuts out intermediaries from the market. A value approach offers only the most valuable part of the experience.

Zoom Multipronged go-to-market strategy

zoom-business-model
Zoom is a video communication platform, which mission is to “make video communications frictionless.” Leveraging on the viral growth from its freemium model, Zoom then uses its direct sales force to identify the opportunity and channel those in B2B and enterprise accounts. 

Zoom defines its go-to-market as a “multipronged go-to-market strategy for optimal efficiency.” It starts with “viral enthusiasm” triggered by users as they join the platform for free.

The good experience is channeled by sales efforts to identify customers opportunities, such to transform a non-paying user into an enterprise customer.

For instance, as pointed out by Zoom in its 2019, 10K “back in 2019, 55% of the 344 customers that contributed more than $100,000 of revenue started with at least one free host prior to subscribing.”

Therefore, the sales model combines the viral demand generation from the free Zoom Meeting plan with direct sales looking for potential customer opportunities.

The Zoom direct sales force includes:

  • Inside sales
  • Field sales

Those are organized by customer employee count and vertical.

In short, Zoom the workflow looks like he following:

  • Free accounts are channeled through the right sales representative.
  • SMBs opportunities will be assigned to an inside sales team member for the acquisition of the paid account.
  • Larger SMBs accounts or potential enterprise accounts are assigned to field sales.

This sort of go-to-market is skewed toward product and distribution.

OYO octopus go-to-market strategy

oyo-business-model
OYO business model is a mixture of platform and brand, where the company started primarily as an aggregator of homes across India, and it quickly moved to other verticals, from leisure to co-working and corporate travel. In a sort of octopus business strategy of expansion to cover the whole spectrum of short-term real estate.

The process of standardization of the experience starts with what OYO claims to be a 150 point checklist that goes from the booking experience to the support center and the on-ground Cluster Managers, ready to solve any problem it might arise during the experience of guests.

Thus the go-to-market (expansion) strategy looks like the following:

  • Identification of the next opportunity/area/vertical to tackle.
  • Acquisition via a growth representative expert in building up partnerships.
  • The expansion team will apply the 150 point checklist to make the property in line with the OYO standard.
  • Support and assistance provided by ad hoc OYO’s representatives.
  • The expansion process ends when the company is able to properly manage the end-to-end customer experience.

This sort of go-to-market is skewed toward distribution.

Partnerships as a go-to-market strategy

partnership-marketing
With partnership marketing, two or more companies team up to create marketing campaigns that help them grow organically with a mutual agreement, thus making it possible to reach shared business goals. Partnership marketing leverages time and resources of partners that help them expand their market.

In some other cases, a successful go-to-market strategy can be primarily about finding the platform or the partner that can help your product to gain the right amount of traction.

Tesla’s sports’ car go-to-market strategy

tesla-vision-statement-mission-statement
Tesla’s vision is to “create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles,” while its mission is “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” Tesla used a transitional business model as its ecosystem grows.

From Tesla’s mission, it’s clear that the company wants to become in the long-run a mass-adopted car company. Yet, when it launched, it was all but a mass-market organization. An outside looker might have had the impression that Tesla was just a sports car company, coming up with a great electric alternative.

tesla-market-entry-strategy

However, that was just a go-to-market strategy used by Tesla to enter an extremely competitive market, which required massive capital to survive in the first place. Tesla, instead of going for a model that would compete with all the other sedan car companies in the middle and lower segment of the market.

The company opted for a go-to-market strategy that was the only feasible at the time. It built a sport’s car, that was interesting only to a relatively small audience, and yet it was competitive.

Sport’s cars have much higher prices compared to other models (like sedan), and perhaps the person buying that type of car might be less sensitive to price itself. That is how Tesla slowly built up its strategy to cover larger spaces within the car industry.

And while Tesla is still a smaller player in terms of volume of car produced, as of 2020, compared to companies like Ford and GM, it is rolling out its strategy to become a mass-market electric car company. As this is a complete market change, it will still require a few years for this strategy to roll out successfully.

Netflix DVD-rental go-to-market strategy

netflix-market-expansion

When Netflix started its operations, it did that in the most feasible way at the time, as a DVD-rental company.

That was the most viable way to start a business that could compete with existing players like Blockbuster. Netflix could have tried to play it bigger. Netflix had known for years that being a competitive player in the DVD-rental space, was “just the beginning of something else.”

Yet the first time “streaming” was announced on Netflix plan was in the 2007 annual report, presented in 2008, and by 2009 annual report the term “streaming” would be mentioned 88 times (FourWeekMBA analysis). That is when things started to pick up and Netflix moved away from its go-to-market strategy.

It took over a decade from its foundation, for Netflix, to see its strategy to roll out fully!

Airbnb, OPN go-to-market strategy

As the story goes, in 2007, Brian Chesky and Joe Gebbia couldn’t afford the rent on their San Francisco apartment that is why they decided to transform their loft in a lodging space.

Yet instead of relying on Craiglist, they built their site, which they called Airbed & Breakfast and leveraged on Craigslist to drive users back to their website,

SourceGrowthHachers.com 

Therefore, Airbnb, to gain initial traction, used what is known in growth marketing as OPN (or other people’s network). It surfed a giant at the time (and still), Craigslist.

To be sure, Airbnb didn’t just gain visibility on Craigslist. Instead, it surfed the site to push its platform. A platform business model to take off run into the so-called chicken and egg problem.

In short, a platform differently from a linear business, to gain initial traction has to kick off its operations on often different sides. For instance, for Airbnb, it was critical to enhance the listings available on the platform to make it valuable for users, and vice versa.

The more users joined, the more it would attract listings. Where to start? Back in 2010, Airbnb figured a mechanism and automation that enabled listings on the platform to be reposted on Craigslist, thus generating substantial traffic.

In addition, those who searched for listings on Airbnb were users looking for alternatives to Hotels, so a great target. By using this initial strategy Airbnb managed to solve its initial growth phase.

Coca-Cola, franchained go-to-market strategy

franchained-business-model

In a FourWeekMBA analysis to dissect the Coca-Cola system, the company uses a template wherein the short term its new operations are controlled and the company keeps a controlling equity stake in the new venture.

As soon as it takes off, the operation goes back from chain to the franchise. Thus the company divests its controlling stakes and in the long-run that becomes a franchising agreement.

From there, the concept of “franchained.” This go-to-market strategy has worked pretty well for Coca-Cola since 2003, to enter new markets by leveraging on its scale, by controlling the new venture, and after that leaving it independent, by tied to Coca-Cola with a franchising agreement.

coca-cola-business-strategy
Coca-Cola follows a business strategy (implemented since 2006) where through its operating arm – the Bottling Investment Group – it invests initially in bottling partners operations. As they take off, Coca-Cola divests its equity stakes, and it establishes a franchising model, as long-term growth and distribution strategy.

DuckDuckGo, differentiating the value proposition to gain traction over the dominating giant

privacy-as-a-business-model

As I explained in privacy as business model, DuckDuckGo used a clearly differentiated value proposition compared to Google. Therefore, even if it entered the search industry quite late, over the years it kept growing.

Source: DuckDuckGo Traffic

I like to call it privacy as a business model, because privacy built into the company value proposition influences the whole business.  

  • It affects product engineering, as a privacy based business model has to make sure that it collects the minimum amount of data necessary to make the service work well, while throwing it on the fly. 
  • It changes the monetization strategy: as also the way the platform makes money, even if hidden, it has to be context-based, not behavioral-based. 
  • It lowers switching costs as the sole fact that the product offers privacy as value proposition, it makes the user pass through the initial friction to switching up.
  • It is a different type of marketing, what we can call contrarian marketing, as it offers an alternative to the current, dominant players, by dismantling their core assumptions.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which target is to reach over two million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get in touch with Gennaro here