The Only Product Strategy framework you need !

An insight-driven and well-thought-out product strategy plan can drive an industry into the adoption of a hidden need.

Watch the following report by CNBC on how Apple forced a change in the smartphone industry by getting rid of the headphone jack.
  • Outline its business strategy
  • Focus on execution
  • Allocate the organizational resources to deliver results

— The importance of strategy for product development

Product leaders need to understand what strategy looks like, make sure it exists and is documented, ensure that all key stakeholders understand what it means and are prepared to do their part to make it happen. Most organizations, from small startups to large multinationals, do not have a good sense of their product strategy or follow it consistently, while those that do — such as Apple — see profits skyrocket.

  • Map out and benchmark competitive offerings in the market
  • Stay on top of technological trends
  • Assess industry drivers and financial factors
  • Define and prioritize actionable strategic options
  • Communicate decisions across the organization
  • Possess grit and conviction to the longer-term product strategy

— Defining success

A great strategy, like a great navigation app, is a series of simple steps that draw a logical route to help you choose the optimal path to achieve your objectives. A great strategy plan:

  • Considers market drivers that will impact your business such as competitive dynamics or customer trends
  • Assesses your competitive advantage and why customers may choose you
  • Encapsulates market challenges and helps you make winning decisions
  • Monitors progress through clear and measurable metrics
  • Aligns key stakeholders around its proposed recommendations

— The Positioning Framework

No matter how long or detailed-oriented a product strategy is, you need to be able to boil it down to its essence and sum it up concisely and clearly in a few sentences. If not, then it means that your strategy lacks or avoids important points. Geoffrey Moore’s value proposition statement or positioning framework sums a companies’ product strategy in the few sentences below:

I. Breaking the framework to build a product strategy

— Identify the target customer segment

Since a product can’t be everything to everyone, in other words, since there is no average product for the masses, first and foremost, identify who you’re building the product for. For example, Facebook was targeted at college students and designed to form habit-forming behaviors in a niche segment before hitting the mass market.

— Understand ‘THE’ customer need

A customer need should be real, meaning you shouldn’t be a solution in search of a problem. Many ideas emerge with the potentials of a new technological innovation or by envisioning a certain method of implementation of current technologies. For example, when Apple came up with the iPod, it wasn’t looking to do something with a portable hard drive rather it wanted to enable customers to take their music library with them, everywhere, because that was a problem indicated by its customers. Moreover, focusing on the problem helps product teams keep an open mind in experimenting with the best available solutions.

— The market category

A market category is how customers will perceive your product and how you will communicate with them. Customers will adapt and make sense of things by categorizing and comparing them to things they already know. Customers will let you know how they perceive your category, by comparing you to current service such as mentioning ‘you’re the Facebook for X’, or ‘Uber for Y’, and that would shed light on how they perceive your product’s category.

— Key benefit

For starters, you only need one key customer benefit — the most important benefit that your product is delivering. Also, note that your product features are not your benefits. For example, an insurance policy protects individuals from potential financial losses. An insurance policy could have many features that combine to deliver an underlying benefit. Do note the difference between a benefit and a feature; customers adopt products not for the features they have, but for the key benefit they create.

— Competition

A customer decides to adopt your product by comparing its benefits against the benefits of other similar offerings out there. Therefore it is important to understand the set of direct and indirect options available to your customers if you want to remain competitive.

— The differentiating factor

The differentiator is the one thing we’d like customers to consider as unique to our product. The differentiating factor is not necessarily the most important feature or benefit of the product, but it will certainly be something that makes the product stand out to help it break through the market clutter. To build a lasting differentiator:

  • Go to customers, run options by them, and see what sticks in their minds
  • A differentiator will fall into one of these categories: lower prices, better services, or exceptional quality

II. Developing the product strategy

— The ‘How’

A strategy is about the ‘what’s and the ‘how’s. Many consulting companies come up with grandiose, detailed, and theoretical plans using best practices, but most of the time their plans end up collecting dust on a shelf because they do not address the ‘how’ part — ‘how’ to build the necessary support for the organization and ‘how’ to get it implemented. Therefore, before getting started on the details of your strategy:

  • Collect input from a wide range of people with a variety of perspectives
  • Pay attention to what others are doing, such as investors or competitors
  • Communicate your project development broadly and frequently with the stakeholders, let them get involved, and help set the direction
  • Figure out how to tell a good story that excites people and inspires them to take action
  • When details are outlined, shift focus from strategy to execution. Get help from all stakeholders to turn strategy into implementation

— Key stakeholders

Your key stakeholders will be people who will help you build or improve the strategy, fund implementation, or execute it, such as:

  • Potential influencers and gatekeepers: internal, usually in the inner circle of the decision-makers, and external, consultants or key accounts
  • Finance people: potentially the CFO or the investors

— Collecting and organizing input

For product strategy development, we want to stay objective on driving organizational and business goals. Therefore we need to collect data that leads to an unbiased analysis to deliver logical decisions and drive action. Product leaders need to collect input from primary and secondary sources, organize and prioritize them to comprehend the nature of the opportunity, make specific strategic choices, and finally, execute this strategic plan. When gathering input:

  • Read industry publications
  • Reach out to thought leaders
  • Follow recent investments
  • Acquire secondary sources of market research
  • Examine financials and projections
  • Follow competitors and assess their decisions and moves
  • Key competitors’ decisions and the reasons behind it
  • Your position in the market
  • A direction that makes sense for your product and organization

— Build support if you want to see your work get implemented

  • Be enthusiastic about your efforts, and share that enthusiasm with others
  • Engage your stakeholders in the strategy-building process. Let them know why a long term perspective on the product is needed
  • Project confidence! Be assertive and have structured and rigorous research that would be defendable
  • Know your audience. Tailor your messaging and pitch accordingly
  • Get the CEO or GM and the functional leaders to present and explain the strategy to their teams so that the entire company is aligned

III. Maintenance

Your product strategy needs to be a dynamic and living document because markets are constantly changing. As market economics, competitive dynamics, consumer behavior, and technologies change, so should your understanding of the circumstances. As the strategy is implemented, the real world will react and with feedback, strategies will need to be updated.

In summary

  • Use the positioning statement as a guiding framework to develop your product strategy
  • Break the positioning statement down, and build it back up with detailed research and input from a variety of sources and perspectives
  • Create a detailed action plan, build support and quickly shift focus on implementation if you want to drive impact
  • Update your strategic plan with market feedback, regularly

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