Product Strategy: What It Is, How It’s Done, Why We Do It
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We know product development is not a one-day or one-person job. It is a combination of various aspects that in some way or another help define the characteristics of the product. The influence of numerous such elements has the probability of invoking chaos into the design system. Hence, this risk calls for some form of guide to ensure order in interactions and the contributions of every element in the system. Companies adopt product strategies to do just that, by assuring the incorporation of various design influencers along with the valuable info and contribution they have in offer for the product development. Product strategy allows products to be more than just an idea, and factor in transforming the product ideas into actual products.
What is Product Strategy?
Product Strategy is merely a product plan. It is a plan for a product concerning the market. Markets are playfield for products. A product is built for a purpose, to serve some need. Unless a product sees the daylight of the market, it would never achieve its objective. So, a product lands in the market offering some value (in features) that solve the market problems. Products have to provide some benefit to appeal to customers. But, how do companies create that medium to serve the market? Market research lends insight into the market; product strategy speaks how to take advantage of the market opportunity. Thus, one can say that product strategy helps shape the life path of products.
A product strategy builds a product life plan relying on these three elements: vision, goals, and initiatives.
Vision is the chief objective of product existence. A product cannot exist without a vision. These are the long-term targets. The overall life cycle of the product is centered around achieving this intended target. Let me draw some similarities between human life and product life. A simple question to you – what is your aim? It could be earning more money, helping the poor. Products have the same intentions albeit in a different context. Product vision includes details like market opportunity, customers, positioning, competitor analysis, GTM plans. They are inclined to company interests. Product vision tells how a product serves the customer needs while being an asset to the company.
Goals are the baby steps to product vision. Goals have their focus on smaller elements which when brought together show the broader scope of the product vision. Goals are fragments of path break-down to vision. These are measurable, hence, hold the key to evaluating the development of products. Goals are short-term objectives. A goal could be achieved in weeks or months, achieving visions takes years and decades. Goals are time-bound, meaning they have to be delivered within a particular period. Their achievement means small progress towards achieving the vision. A goal could be something like:
• 10% increase in sales
• 5% drop in conversions
Initiatives are the driving force that helps accomplish goals, and in order, visions. Goals are the finish line; initiatives are the paths. These are the road of actions taken within an organization. The implementation of initiatives is mandatory to achieve respective goals. Goals could be something like,
• Expanding into a new market
• Provision of customer support
Whenever a product head goes for creating a product strategy, he/she has to keep these three elements in his/her mind. Vision, goals, and initiatives integrate these intricate elements of the whole product planning process. Customer needs, competitors, required product values, and other such parameters need incorporation to establish a proper understanding of what the product is, what it intends to achieve and who it is going to serve.
How it’s done?
Product strategy is all about planning and its execution. And what one does before planning something? They gather data related to the subject. In this case, it’s the user or market research.
Market research helps companies assess the market, view the opportunity to serve the customers by tending to user needs. Analyzing the market sheds lights on many aspects that relate to the product. It exposes companies to their target customers with their needs. Moreover, companies get some valuable insight into what the competition is doing to address the market issue. So, research makes businesses aware of competitors’ moves while also showing what the current products have in offer for the users. The primary value provided by the competitor products is the basic user need. Product designs have to be centered around these user needs while providing some additional benefits and experience to distinguish themselves from the rest of the crowd. Hence, market research is the first step to acquaint companies with the unknown variables and assess the market options.
Research makes business rich in information. The next phase is to make some meaning out of all of this data. After data collection, design teams have to deduce the information and determine the vital points that will help take the next steps of product development. Teams have to determine the existing product values in offer in the market. They have to evaluate the values being offered with the research results. They have to focus on the pains that hold most priority to the users and compare the current crop for their effectiveness in serving the corresponding need. If the current product options are failing the customers, then the company has landed on a gem of a product idea which gives the users what they want. However, such instances are rare. Existing products with a significant market presence address the primary user needs. If a company intends to dive into that market with a new or revised product, they have to offer additional values upon the primary.
For example, a company wants to launch a grocery shopping app. The app has to provide the fundamental value (ability to shop for groceries), but for it to stand out from apps, it needs to offer some other values additionally. It could be a feature like timed delivery.
New products are developed from the provision of primary needs along with some other appealing values. The differentiation needs to make the product stand apart in a positive sense to accomplish the intended goals.
User and business goals
Any product serves both the customer and the business. But what makes a product? Let me be straightforward about it with an example. What is a phone? A phone is a device that helps you communicate with people without being present with the person. What is a mobile phone? A mobile phone is a device that aids communication with people but does not confine you at a specific location as a phone does. Hence, the term ‘mobile’ as it allows movement.
Products (phone or mobile phone in the example) provide some value (ability to communicate) to the users. In offering these values, product address the user goals along with the goals of businesses. Both goals are different from each other and only have a product as the common factor.
How the product serves the customer or company is defined by their respective goals. Products incorporate some value for the customer in the form of features. The customer-product interaction and relationship benefit the companies. A user need points to user goal. The users interact with the product to achieve their intentions. Product values address user goals. Though the act of a user-product interaction is beneficial for companies, business goals are entirely different from product interaction. Business goals depend on product intention instead of product interaction. They align with the idea of why a particular product exists, rather than concentrating on what it does. For example, a product could tick the boxes for generating revenue, promoting other products, or brand exposure in the business goals checklist. The meaning of product existence varies with the perspective, which is different from a user to the company.
A product strategy does not remain the same for the entirety of the product life. Any product plan designed is with respect to the current conditions. These conditions change over time, but the product intention does not change. Hence, product plans go under constant amendment during the life cycle of the product to cope with the product vision. Changes might happen during the introduction of the product to market, its growth, maturity, or death/revamp. Product teams need to have touch with scenario changes and act accordingly to enable the product to accomplish its vision. The strategy alterations are necessary to achieve vision while adapting to new market conditions.
Why do we do it?
It’s a simple task of organizing the intentions and actions. Why do we plan? Aren’t plans made to accomplish something while keeping a smooth and steady flow in progress? Innovating a product contains a long list of tasks and measures. It’s easy to get lost while concentrating and working on a particular stage of developing products. Planning makes sure something like that does not happen.
Besides, product strategy helps assess the expenditure of resources and time. Disorganized actions will lead to wastage of resources and time. Apt product strategies prevent the potential risk of overspending resources over particular aspects. Product strategy helps teams progress through steps in a hierarchy or sequence. Take the example of a person washing their clothes in a washing machine. Here are the steps:
• Switch on the washing machine and water supply.
• Put clothes into the machine.
• Set your wash preferences.
• The machine does the washing.
• Finally, you get clean clothes.
The goal was to have clean clothes, which we did. But think what would happen if in between any one of the steps was not performed? Would you expect the same result? Not likely. The sequential order in the activities performed resulted in the final goal achievement, and that’s the takeaway.
Product strategy ensures that any development that takes place is in the interest of the product. It prevents missing out on product goals and subsequently, vision. It helps maintain a clear focus on the target. Unless teams are goal-focused, they risk missing out the entire product intention.
Besides, product strategy are the pathways to product vision. A product vision guides the respective product strategy. Visions are the final objective of the product, think of it as their aim in life. Product strategies are the blueprint of how the products intend to achieve that aim.
Further, product plans help define the product roadmaps. While product strategy deals with planning the product development, product roadmaps, on the other hand, deal with the implementation of product strategies. An apt product strategy will result in an adept roadmap to create what would be the perfect product for the customers.
Through this article, we were able to put the aspect of Product Strategy under the microscope. Product strategy supervises the use of research information and resources in building plans for developing products based on the user pain points. Product strategy achieves this task by incorporating three significant elements – vision, goals, and initiatives. Vision aligns with the company by stating the long-term objective of the product. Goals are for short-term, cumulatively they shall result in achieving the product vision. Initiatives are the actions that direct the goals.
To prepare an effective product strategy product teams have to perform extensive market research. The research helps them be aware of the opportunities and constraints in designing the product.
Product plans help manage elements responsible for product design and development by a systematic allocation of resources, information and time.
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