How to create a product strategy
Creating a product strategy is a critical step in the journey of every startup or established company. It serves as a roadmap, guiding your product from conception to market success.
Let’s explore various methods for developing a product strategy, examine examples of successful strategies, and discuss considerations for different product categories and variables.
Understanding product strategy
A product strategy outlines your product’s vision, the market it serves, and the steps needed to achieve both short-term and long-term goals.
It’s a blend of market understanding, value proposition, and the tactical path to market leadership.
Key components of a product strategy:
- Vision: The overarching goal or purpose of the product. Without a vision you don’t know where to go and risk wasting time on detours.
- Target Market: Identification of your primary users or customers. This can be an exploration as well but makes it easier if you pick a defined target user from the start.
- Value Proposition: What makes your product unique and desirable. This should be your unique selling point.
- Roadmap: A timeline of milestones and key deliverables. It can be good to have a high level long term roadmap as well as a more detailed roadmap for the next 6-12 months. Also read When creating a product or startup think in stages
Different methods for developing a product strategy
- Lean Methodology: Focuses on creating a Minimum Viable Product (MVP) to quickly enter the market and iterate based on feedback. This approach is ideal for startups or new product lines.
- Blue Ocean Strategy: Involves creating a new market space or “Blue Ocean” rather than competing in an existing market. It emphasizes innovation and uniqueness.
- Porter’s Five Forces Analysis: A framework for analyzing the competitive environment and understanding the forces affecting profitability in your industry.
- SWOT Analysis: Evaluates Strengths, Weaknesses, Opportunities, and Threats to make informed strategic decisions.
Examples of successful product strategies
- Apple’s iPhone: Apple used a Blue Ocean Strategy by combining a phone, an iPod, and an internet communicator, creating a new category in the mobile phone market. The Appstore was also a key differentiator.
- Spotify’s freemium Model: Spotify’s strategy focused on providing free, ad-supported access to music with the option to upgrade, revolutionizing how people listen to music.
- Tesla’s electric cars: Tesla initially targeted the high-end market with its Roadster, then gradually moved to more affordable models, aligning with its vision of sustainable transport.
Considerations for different product categories and variables
- Technology products: Must consider rapid innovation cycles and customer expectations for new features.
- Consumer goods: Focus on branding, customer loyalty, and distribution channels.
- Services: Emphasize customer experience, service quality, and value proposition.
Variables to consider:
- Market size and growth: Understand the potential and growth rate of your target market.
- Customer needs and behaviors: Tailor your strategy to meet the evolving needs and preferences of your customers.
- Competitive landscape: Assess your competitors and find ways to differentiate your product.
A well-crafted product strategy is the foundation of any successful product. By selecting the right method and considering the unique aspects of your product category, you can create a strategy that not only guides your product development but also ensures its market success.
Remember, the key is to be flexible and adaptable to the changing market dynamics and customer needs.
Also read 10 strategies guaranteed to help you win
