What is the product strategy and how is it developed? In this article, we will talk about the definition of product strategy, different types of strategy, and some real examples of product strategy.
What is the product strategy?
A product strategy is a high-level plan that defines what your product’s goals are throughout its life cycle and how it supports the organization’s goals. The product strategy will also answer who the product will serve and how it will benefit them.
There is no single blueprint for product strategy, but successful strategies include the following in common:
1- They have a purpose. Building a product just for the sake of building and maintaining something is not a strategy. Products must have a purpose. Understanding what this goal is and drawing the attention of the entire organization to this goal is the first step.
2- Know the customer’s needs and how they evolve. All products need customers, so any product strategy should be based on meeting their needs. Because customers don’t always know exactly what they want, product strategy must bridge the gap between what customers say and what they need. It is important to understand that customer needs are not fixed. They change over time and the product must match them.
3- Know your value chain and how it evolves. Products and their users do not exist in a vacuum. Product strategy must include how it fits into the larger ecosystem and determine where it adds value and where friction remains. By changing that ecosystem, the role of the product in it may also change.
4- Determine what change will take place. Although strategic thinkers do not have the power of prediction, they must look to the future and anticipate potential disruptive forces that will limit or expand the opportunity for product growth and use.
5- Define actions against those changes. Looking ahead, determine what should be included in the product strategy to mitigate these disruptions or take advantage of future opportunities.
6- Measure success. If one does not keep track of the project’s progress, there is no way to know the success of the strategy. While the strategy itself shouldn’t influence specific metrics, tracking progress and KPIs shed light on performance trends and provide potential warning signs.
Create your product strategy
Creating a product strategy is not easy. If so, every entrepreneur will achieve amazing success and all startups will become big brands. But following a few simple rules will ensure you don’t forget anything.
Here are five steps to a great product strategy:
Do not ignore the competitors.
Just as a product manager shouldn’t design the entire product strategy on his own, a product strategy can’t ignore the other things going on. It is rare that the product does not face direct competitors or suitable alternatives for the services and functions it provides.
Conducting a competitive analysis provides a systematic approach to evaluating other companies competing for potential customers. The features of each option should be evaluated along with the features and capabilities that fit the target market. Not all items in the feature matrix are equally important to buyers and real users.
Additionally, product managers should not be tricked or prevented from playing their role in creating a pricing strategy. Despite what sales or business development might say, product management is best understood from a product’s COGS (cost of goods sold) and has real value for different customers.
Instead, product management should play an active role in product pricing strategy and work with other business departments to design a model that drives growth and targets the company’s revenue and profitability goals.
The role of the product leader in product strategy
From the time of product ideation to its production, the role of product management must be compatible with the different stages of its life cycle. Strategy never dies, but it has two distinct phases.
Product management throughout the product life cycle
Initial strategy development begins with ideation. The strategy undergoes rapid evolution as MVPs are designed and built, feedback is gathered, and the product takes shape and changes as it tries to find the right market and go into production.
Product managers at this stage spend more time developing and refining strategies than ever before. There are many unknown learning variables to be determined.
As soon as the product is acquired, product managers take on a different set of responsibilities. Attention shifts to growth and sustainability, which is usually associated with decline management. Here the product strategy should not see significant changes, although there is no time when the topic is not part of the product manager’s portfolio.
Collecting personnel
These life cycle stages also affect the composition of the product team. Different stages require different skills, not to mention the amount of work to be done. With this in mind, product management should have a strategic approach to employees.
Hiring product managers is not as simple as some other fields. There is no ideal product management resume or qualification, and the role requires a unique combination of soft skills, creativity, and technical acumen.
Because these demands vary throughout the product lifecycle, product managers must carefully consider when is the right time to scale the team. The ideal team size also depends on the complexity of the products, the number of products in the total portfolio, and which areas deserve more attention.
Collaborate with other teams
Even with the creation of a product team, product strategy meetings should involve other parts of the organization. No matter how many great ideas and talented people the product management ranks have, getting feedback from other departments is critical.
Preventing these product strategy meetings from derailing is another challenge that product managers face.
Product strategy meetings can accommodate these diverse insights by keeping everyone on the same track, eliminating side topics, and setting clear rules for interaction and meeting goals.
Tie product metrics to product strategy
While a good product strategy should include more than just a set of measurable goals, metrics play a vital role in defining and implementing product strategy.
When it comes to defining product metrics, product managers don’t have to reinvent them. Assuming the availability of instrumentation and reporting, a set of understandable and valuable metrics is available to them. The hard part is deciding which one to focus on.
Product maturity will also determine which metrics are most relevant to that stage of the product strategy. Once a product is in use and analysis is underway, product managers can use the metrics to adjust and refine product strategy. Data provides a valuable feedback loop.
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A complete guide to introducing the project management plan (Project Management Plan)
