Every company that sees technology as a competitive differentiator needs a product strategy. And every person who touches a product inside of an organization directly contributes to its success or failure. A comprehensive product strategy incorporates involvement from all stakeholders in the ecosystem.
Building a product strategy starts with developing a high-level plan that defines the vision for your product and how that vision will be realized. It is a critical component of any successful product development process, as it helps to ensure that products are aligned with customer needs and business goals.
Developing your product strategy plan starts by identifying some important realizations about the functionality of your product, it's intended purpose and the target audience. Essentially, a well-defined product strategy should answer the following questions:
- What is the product's purpose?
- Who is the target market?
- What are the product's unique selling points (USPs)?
- How will the product be differentiated from competitors?
- What are the product's key performance indicators (KPIs)?
- How will the product be marketed and sold?
Whether you are seeking growth by launching new products and services, or need to manage the lifecycle of existing ones, a Product strategy can be broken down into three main components:
Product vision: This is a high-level statement of what the product is trying to achieve. It should be aspirational and inspiring, and it should provide a clear sense of direction for the product development team.
Product strategy: This is a more detailed plan for how the product vision will be realized. It should include information on the target market, the product's USPs, and the product's competitive landscape.
Product roadmap: This is a living document that outlines the product's features and functionality over time. It should be updated regularly to reflect changes in the product vision, the target market, or the competitive landscape.
Product strategy is an iterative process that should be constantly evolving as the product matures and the market changes. By taking the time to develop a well-defined product strategy, businesses can increase their chances of success in the long run. Here are some examples of the most common product strategies:
Cost leadership: This strategy focuses on offering products at the lowest possible price. Companies that use this strategy often have a high volume of sales and a low profit margin.
Differentiation: This strategy focuses on making products that are unique and stand out from the competition. Companies that use this strategy often have a higher profit margin, but they may have a lower volume of sales.
Focus: This strategy focuses on a specific market segment or niche. Companies that use this strategy often have a deep understanding of the needs of their target market and can offer products that are highly tailored to those needs.
Quality: This strategy focuses on producing high-quality products that meet or exceed customer expectations. Companies that use this strategy often have a high profit margin and a loyal customer base
Service: This strategy focuses on providing excellent customer service. Companies that use this strategy often have a high customer satisfaction rate and a strong word-of-mouth reputation.
The best product strategy for a particular business will depend on a number of factors, including the company's resources, the target market, and the competitive landscape. However, by taking the time to understand the different types of product strategies and their benefits, businesses can make informed decisions about how to best position their products for success.