5 Steps to Develop a Winning Product Strategy
All products start with a well-defined strategy focused on customers and the market. This strategy identifies the product direction and clarifies what you want to achieve. It helps to align a company and keep everyone focused on the work that matters the most.
What are the particular elements of the product strategy that brands should have to take to make their businesses succeed? How can this strategy be helpful if the product is not gaining traction in the market? After all, why is it important at all? All these questions are going to be covered in this post. Take 7 minutes to figure it out.
What is Product Strategy?
A Product Strategy is the foundation of a product life cycle that represents the execution plan for further development. It allows businesses focusing on specific target audiences as well as on essential product and consumer attributes.
The strategy culminates in the product’s vision. The ideas of the well-defined strategy should clarify how your users and rivals will view the product.
Any strategy is essentially a roadmap, where each design step should be a guide for a team from beginning to end. Product teams use the strategy in planning, design, and marketing to identify the direction of the company’s activities.
Besides assistance in marketing and design, the strategy helps in targeting the product to the right segment.
What is the power of Product Strategy?
- It assists teams to determine the exact steps to be taken to lead the product to success.
- It directs the company to decide the target market and market penetration.
- It prepares the team and the company towards changing market conditions and for competitors’ responses.
- When the product is set on an independent path, it allows the company to focus on multiple products in a short time.
Key Components of Product Strategy
A successful product strategy covers 4 key components: customers, competitors, business, and the macro environment.
Customers
A product is the foundation of a successful business. However, first, it’s worth defining who your customers are. Companies may serve multiple customer segments, for example, serving businesses and individuals. You should be sure about your customers’ needs before setting a long-term product strategy.
Competitors
You will always face direct competitors or companies that provide a similar value proposition. This is the market reality. The strategy of your product defines how you position it to your customers considering the other market players.
Business
Stakeholders expect to get money and a return on investment. The specific way of how the product will make money and achieve business results should be described in the product strategy. It’s crucial to determine your business to let your team understand how the product facilitates it.
Macro-environment
Macro-environment covers economic, political, technological, and cultural factors that may affect the market and product over the short or long term.
The strategy should consider emerging markets, emerging technologies that may have an impact, economic forces, and evolving customer needs.
How to Create a Product Strategy and Where to Start?
1. Discuss your potential strategy prospects with potential customers
The initial objective of a young product manager without experience is to develop a product strategy in any way. He/she interviews executives, brainstorms with the product and marketing guys, studies available market data, etc.
The most talented and experienced PMs who have studied the market will definitely have some amazing ideas about where to take their company’s product.
Successful product teams first build a culture to ask the right questions and validate opportunities objectively. Before you get too far down the path of creating a product roadmap and strategy, listen to what your users tell you they want.
2. Work on a high-level product vision
Before mapping out your product backlog strategy, put your efforts into developing a high-level product vision. This is a mission-critical step to making your strategy a success.
When you communicate a compelling vision, you have more chances to earn executive approval to move forward. Share your enthusiasm for the product while communicating with developers, marketing and sales teams, analysts and tasters.
3. Define the goals
Despite the obviousness of this step, many teams even to not thinking about it and logically fail.
After establishing a product vision, it’s time to use that vision to define high-level objectives, specific things you want your product to reach.
One way of thinking relates to the most important thing your product may achieve. It’s about capturing a new type of user persona and increasing the lifetime value. Another way is the way to define whether your product strategy is working or needs adjusting.
4. Guide your roadmap using the goals
Considering the previous 3 steps, we are moving toward executing a product development plan. The product vision with the goals will help you determine what initiatives should be added to your product roadmap.
The important thing here is to translate those objectives into more concrete details about the product and tie the decisions about epics, themes, and other initiatives back to the outlined product goals.
At this stage, you will definitely need a powerful framework for prioritization. There are plenty of them, but we’d like to suggest considering the most powerful:
Prioritizing will help you to ensure you make each decision about your product strategy on a really strategic basis.
5. Check-in with your product’s vision to confirm your plan is on track
At this stage of developing your strategy, you have a high-level vision that you can easily communicate. Your well-defined goals perfectly reflect and support it. Besides, you have a cozy visualization thanks to your product roadmap where every initiative is there for a reason. All initiatives tie back to your goals.
It seems that you are ready to start development with a solid plan.
However, be also ready that this established solid plan will not the 100% exact route your product development process will follow. Priorities, resource levels, executives’ patience, competitor behavior, and other factors may suddenly change.
Takeaways
The final tip for developing your awesome product strategy relates to periodically reviewing the vision and strategy you decided on early in your planning.
Do not doubt to take a step back to make sure that all initiatives and priorities still support the winning strategy you worked to create.
