Company Context

NovaWorks sells a cloud-based workflow automation platform to large enterprises in manufacturing, logistics, and financial services. The company generated $180M ARR last year, is growing 22% YoY, and currently holds an estimated 6% share of its core enterprise workflow software market. NovaWorks has historically won deals by offering a strong product at a 15-20% discount to the two largest incumbents, but leadership is now debating whether this pricing-led strategy is hurting long-term profitability and brand positioning.

Strategic Situation

You are advising the CEO and board on the next 3-year growth strategy. The company must decide whether to continue prioritizing market share through aggressive pricing and broad enterprise pursuit, or shift toward a more selective, higher-margin approach focused on the most profitable customer segments and use cases. The decision matters now because the market is maturing, customer acquisition costs are rising, and NovaWorks plans to invest heavily in AI features that will require meaningful R&D spend over the next 24 months.

Data Points

Additional facts:

• The top two competitors hold 32% and 24% market share respectively.
• NovaWorks' average CAC is $190K per new enterprise logo.
• Customers acquired through discount-heavy deals have 5-point lower gross margin and 3 percentage points higher annual churn than customers buying premium bundles.
• Management has approved up to $45M incremental investment over 2 years for AI product development and enterprise sales capacity.

Deliverables

1. Assess how NovaWorks should think about the trade-off between market share growth and long-term profitability in enterprise technology.
2. Size the realistic growth opportunity over the next 3 years and identify which customer segments or deal types create the most value.
3. Evaluate whether aggressive discounting is a sustainable go-to-market strategy against larger incumbents.
4. Recommend a clear strategic direction, including pricing, segment focus, and go-to-market implications.
5. Define the key metrics leadership should use to judge whether the strategy is working.

Constraints

• The board expects NovaWorks to reach at least $300M ARR within 3 years.
• EBITDA margin must improve from 8% to at least 15% by year 3.
• Sales headcount can grow by no more than 25% in the next 12 months.
• The company cannot pursue a major acquisition; the plan must be organic.