Assessment of potential for successful U.S. expansion

The 5-Step Transformation Process

The 5-Step Transformation Process

The objective of the 5-Step Transformation Process is to have verified and refined the strategy model, achieved success with several key customers and partners and recruited key management. The existence of U.S. proof-of-successes will improve the likelihood of recruiting best possible management. The end-goal is to have key issues resolved, an initial track record in place and to be ready to continue the expansion in a structured and sustainable way.

The process structure aims to improve the probability for success and reduce time and expense to the U.S. market. In the case proof-of-success is not attained, the process allows for the withdrawal of activities in an organized way, minimizing expenses and exposures.

Below, the five phases are described with corresponding 2 - 4 main focus areas of activities. All phases, but specifically the Plan and the Adapt, are performed in close cooperation with company management. As required, new learning in subsequent phases is expected to continuously refine previous focus areas. The entire 5-Step Transformation process may take from one to two years to complete. Both the Swedish and the U.S. Advisory Boards review progress regularly and provide suggestions and contacts for improvements.

What about deviating from the 5-Step Process? Yes, of course that's possible. But we both need a clear understanding of the reasons and potential consequences.

Each step is described in more detail below.

Plan

The objective of this phase is to put the necessary plans in place to successfully perform the following phases. Based on the Assessment results, this phase addresses the following areas:

Key Activities and Milestones	Draft activity plan and set milestone objectives
Team and Responsibilities	Identify team required to perform activities to reach milestones Assign team roles and responsibilities Identify Advisory Board members
Legal and Financial Matters	Address legal requirements such as incorporation, the relationship between the Swedish and the U.S. companies and selection of board members Develop draft contracts Open a bank account and set up book keeping
Budget	Develop initial budget for all phases, including an overall break-even analysis Receive approval for budget and overall approach from company board

Proof-of-Success

Above activities completed and approval by company board

Adapt

The objective of this phase is to adapt strategy, product or service and communication for the U.S. market in order to get ready for the sales effort in the following phases. Modifications are based on findings during the Assessment and potential new research and learning.

Strategy	Adapt and refine chosen strategy model for the U.S. market, including vision/mission, detailed target customer segmentation, marketing strategy (product, price, promotion, place/channel and positioning) and develop tactical plans for addressing target segment customers
Product	Make modifications to product or services in order to satisfy target customers' key requirements and address potential regulatory requirements
Communications	Refine marketing communications to support the U.S. sales effort and attract target customers. This could include modifications of key message to target segments, a one-page corporate overview, web site, product /service / corporate presentations and product / service demonstrations

Proof-of-Success

Strategy selected and product and communications modifications completed Optionally, a formal Business Plan may be part of the output from the Plan and Adapt phases

Engage

The focus area of this phase is sales and business development. The objectives are to engage initial customers and partners and refine the sales process.

Customer and References	Engage the sales process with a number of potential customers of whom several could potentially become U.S. reference accounts Refine the sales process and sales support material based on new learning
Partners	Engage discussions with a number of potential partners who could become important strategic alliances in order to scale marketing and distribution coverage

Proof-of-Success

Obtained about 75% probability in sales discussions with, for example, 6 - 10 potential key customers, in some cases through pilots Obtain serious interest in potential partnership with, for example, 4 - 6 strategic partners Refined strategy, product and communications based on new learning

Solidify

The main objectives of this phase are to close initial customer and partner deals, recruit key managers and obtain funding, if necessary, for future expansion.

Key Managers	Recruit key management with appropriate skills and experience to take on the expansion process
Funding	Obtain funding for the future expansion process if the scaling-up prospect looks promising and additional cash flow is required

Proof-of-Success

Closed business agreements with, for example, 3 - 6 key customers and 2- 4 strategic alliances Refined strategy, product, communications and sales process based on new learning Recruited key management with appropriate skills and experience to take on the expansion process Obtained funding, if desired

Expand

The objective of this phase is to expand the U.S. team, partner and customer base and move out" of the "Interim Ventures" incubator process.

Team	Recruit other key team members with required skills and experience
Customer base	Expand the customer base. Close new business and expand current relationships Make partnerships work to develop new business

Proof-of-Success

Closed additional customers business Ensured that strategic alliances are creating new business Refined strategy, product, communications and sales process based on new learning Recruited new team members with required skills and experience Moved out of the "Interim Ventures" incubator process