How to approach a strategy question

A product sense question asks you to design something for a user. A strategy question asks you to decide where a business should put its money, people and attention. "Should we enter this market?" "How should we respond to this competitor?" "Build it or buy it?" "Where should we invest next year?"

These questions feel open-ended, and that is the trap. Most candidates list everything they know: market size, a SWOT grid, five competitors, a dozen ideas. Twenty minutes later there is still no decision.

Key idea A strategy answer is a decision, not a survey. Everything you say should help you choose between real options, and you should end by choosing.

#What the interviewer is listening for

Across companies, strategy rounds tend to reward the same few things:

• Business judgment. Do you understand how this company makes money, what it is good at and what it cannot easily do?
• Structure under ambiguity. Can you turn a vague prompt into a clear decision with a goal and a time frame?
• Honest options. Do you consider real alternatives, including doing nothing, or do you argue for the first idea you had?
• Commitment. Do you make a recommendation and defend it, while staying open to new facts?
• Risk awareness. Do you know what could go wrong and how you would find out cheaply?

Nobody expects you to know a real company's internal numbers. They expect you to state sensible assumptions out loud and reason from them.

#The Spoken Memo

Many product teams make big calls with a short written memo: the decision, what we know, the options, what we recommend and how we will know if we were wrong. The kit's approach, the Spoken Memo, is to say that memo out loud, with the same five steps in every case in this module.

That leaves time for the interviewer to push back. Announce the five steps at the start so the interviewer can follow you and steer you.

To show each step, we will use one running example.

Interviewer You are a PM at Pantry Box, a fictional US meal-kit company. Should we let customers add everyday groceries, like milk, eggs and bread, to their weekly box?

#Step 1: Decision

Restate the question as a choice, then pin down three things: the goal, the time frame and the constraints. Ask two or three clarifying questions, not ten.

You So the decision is whether to add a grocery add-on to the weekly box, and if so, in what form. Before I start: is the goal more revenue per customer, fewer cancellations, or attracting new customers? And what time frame are we judging this on?

Interviewer Leadership cares most about cancellations. Assume a one-year horizon.

Now you have a goal (reduce cancellations, which you can measure as monthly churn) and a horizon (one year). If the interviewer says "you decide", pick one and say why.

#Step 2: Ground

Look at the situation through three lenses, briefly:

• Customers. Who are they, what job are they hiring the product for, and how well is that job done today?
• Market. How big is the opportunity, who else serves it, and how does money flow?
• Us. What do we have that others do not (customers, data, distribution, brand, technology), and what do we lack?

Then say your assumptions out loud and label them as assumptions.

You On customers: people cancel meal kits when life gets busy and a separate grocery run feels like the real shop. If the box covered the basics, it might become part of the weekly routine. On the market: grocery delivery is crowded and margins are thin. On us: we already have a weekly delivery slot to the door and cold-chain packing, which is a real asset. I'll assume 500,000 weekly subscribers. If 20 percent add groceries averaging $15 a week, that's about $1.5 million a week, roughly $78 million a year in extra revenue, though at low margin.

Keep the Ground step tight. For quick sizing, the method in the estimation approach works here too.

#Step 3: Options

Lay out three or four options that a sensible team might actually choose. Always include a baseline: keep doing what we do, or put the money into the core product instead. Try to include one middle path, such as a pilot, a partner or a narrower version.

You I see four options. A: don't add groceries and spend the effort on recipe variety. B: a full grocery catalog of a few hundred items. C: a short list of about 20 staples that pair with the recipes. D: partner with a grocery delivery service and let customers link accounts.

Say each option in one line. If an option is obviously silly, it is a strawman, and interviewers notice.

#Step 4: Call

Pick three criteria that fit the goal from Step 1, compare the options on them and choose one. A good default set is:

• Customer value: how much does this help the customer and move the goal?
• Right to win: does it use something we have that others lack?
• Prize versus cost and risk: is the upside worth the money, effort and downside, and can we reverse it if it fails?

A small grid helps, said out loud or typed into a shared doc:

Then state the call in one sentence: what, why and what you are giving up.

You I'd go with C, the short staples list. It rides on the delivery slot we already pay for, it's cheap to try and easy to reverse, and it tests the churn idea without turning us into a grocer. I'm giving up some revenue upside versus a full catalog.

#Step 5: Proof

A call without a plan to check it sounds like a guess. Name the top two or three risks, a cheap test for each, a success metric and the result that would make you stop.

You The main risk is that it adds revenue but doesn't change churn. So I'd test it with a random 10 percent of subscribers for eight weeks and compare churn for the whole test group with everyone else's, not just among people who use the add-on, since they are likely more engaged anyway. I'd want at least a few percent relative improvement in churn for the test group, with no drop in box ratings. Second risk: packing errors. We'd start in one fulfillment center. If churn doesn't move, I'd stop, even if the revenue looks nice, because revenue wasn't the goal.

Finish with a two-sentence summary of the whole answer. Interviewers remember the last thing you said.

#Where the classic tools fit

You will hear about well-known strategy tools. Use them as quick checklists inside the Ground step, never as the shape of your answer:

• Porter's five forces (rivals, new entrants, substitutes, buyer power, supplier power): can anyone make money in this market?
• SWOT (strengths, weaknesses, opportunities, threats): cover the "us" lens honestly, weaknesses included.
• Jobs to be done: describe customers by the progress they want to make, which often reveals unexpected competitors.

Credit goes to the insight, not the tool's name. "Grocery delivery has thin margins and many rivals, so we shouldn't fight head-on" is a five forces insight without the lecture.

Try it Take the prompt "Should a fictional coffee chain launch a paid monthly coffee subscription?" Spend two minutes writing just the Decision step: your restatement, your two clarifying questions and the goal you would pick if the interviewer said "you decide."

#How the rest of this module works

The next five lessons apply the Spoken Memo to market entry, competitive response, build, buy or partner, monetization and pricing and where to bet for growth. Worked cases 1 to 3 and 4 to 6 show it start to finish, and common traps closes the module.

#Recap

• A strategy question asks you to make a decision. End with a clear call, not a list of considerations.
• The Spoken Memo has five steps: Decision, Ground, Options, Call, Proof. Announce them up front.
• Ground through three lenses (customers, market, us), and label every assumption.
• Always include a baseline option, and compare options on criteria tied to the goal.
• Close with risks, a cheap test, a stop condition and a short summary.