The product strategy defines what the product manager wants to achieve, provides a context around their market, and guides the high-profile work themes that help them achieve their goals. The company wants to align the organization around a shared vision and keep everyone focused on the work that matters the most. The goal-first approach is the best way for product managers to achieve innovation. Strategic planning should occur before the product team delves into the detailed work of building a roadmap and developing new capabilities. If done well, the product team will associate each function with a larger objective.
A company’s product strategy is a roadmap for developing its products or features. It includes everything its team needs to do to achieve its business goals. The product team will use this document as a guide and refer to it when questions arise. 65% of businesses refer to product strategies when performing important decisions. Therefore, it is essential to create a thorough and detailed strategy to make sure that each task is done correctly and timely. It describes the issues the product will address and how it will affect customers and companies.
What Are the Main Types of “Product Strategy”?
Product strategy has the following main types.
- Cost Strategy: The focus of the cost strategy is to create the most effective products at the lowest price. It evaluates the resources used and determines where to save money during production. It is an effective strategy for low-cost procurement, such as household cleaning products. So, for these industries, if the product team creates a product below the competition’s price, it will be the customer base’s preference.
- Differentiation Strategy: Price is not the primary criterion for differentiating company products. Product teams have many other ways to differentiate themselves in their industry. So maybe it is a luxury product using world-class materials. Alternatively, its ground-breaking function has transformed space. Whichever it should be, the focus of this approach is to give their product a personality, creating something that will make customers memorable and happy.
- Focus Strategy: If a company holds a large customer base, it may like to make a product that attracts at least one particular buyer role. It is an effective strategy because it creates a customized solution for a specific group. It is a great idea to gain brand loyalty for new customers.
What Is Meant by Strategic Product Planning?
Strategic product planning is the method of determining how to accomplish a company’s vision. The product manager will set goals and initiatives to guide their strategy and a timeline for achieving them by working backward from the end state they are asking for. There must be a unified plan to link corporate-level goals to products. It ensures consistency between their overall goals and day-to-day work, often called execution.
What Is the Importance of Product Strategy?
It is difficult to know whether a company will pay off in an uncertain environment. However, they still need to make decisions based on their business goals and produce results. It is like navigating a boat. They cannot get from A to B without a flight plan and regular location check. Moreover, they have to adjust along the way. They have to avoid other vessels (they will be amazed at how many they encounter all over the sea) and adjust to currents and winds. They may even have to adjust their entire voyage to avoid a hurricane. Their product strategy is their product’s navigation plan.
Developing a complete product strategy helps to reach the company’s target audience. When companies are right, they prepare themselves to be a severe competitor. It is only part of the journey, but some places can start to be market followers or the difference between market leaders.