A Guide to Product Strategy

Theodore Levitt, a German American economist and a professor at the Harvard Business School, once said, “Creativity is thinking up new things whereas innovation is doing new things.” New products and disruptive solutions are never possible without systemic thinking and analytical reasoning. Behind every success lies a robust strategy driven by customer needs and market trends.

In the simplest terms, Strategy is the direction and scope of an organization over the long term to achieve organizational goals.

A product strategy is a high-level plan that defines product goals throughout its life cycle and how it will support organizational goals. The product strategy will also answer whom the product will serve and how it will benefit them. Product strategy defines what you want to achieve, provides context around the market that you operate in, and guides the large themes of the work that will help you accomplish your goals.

Elements of Product Strategy

1. Ideation: Ideation is the process where you generate ideas and solutions through sessions such as sketching, prototyping, brainstorming, brainwriting, worst possible idea, and a wealth of other ideation techniques. During ideation, the aim is to generate ideas that the team can then filter and cut down into the best, most practical, or most innovative ones to inspire new and better design solutions and products.
2. Market Research: Market research is the process of gathering data on goods and services to determine whether the product or service will satisfy customer needs. Market research can identify market trends, demographics, economic shifts, customer’s buying habits, and other information on the competition. It will help to define target markets and establish a competitive advantage in the marketplace. For the market research to be effective the information must be timely and relevant to the business.
3. Customer Needs: Identification of customer needs is one of the crucial steps in defining a product strategy. There are several techniques to identify customer needs, for example, by conducting focus groups, developing user personas, listening to your customers or social media, or doing keyword research. Developing user personas is one of the best ways to identify customer needs. User personas are fictional characters that bring customers to life. Creating user personas is one way to develop empathy for customers; by documenting their likes and dislikes, professional aspirations, challenges, and more. All these details help guide how to build features that will solve their problems and identify their needs.
4. Competitor Analysis: To anticipate the moves of your rivals, you must understand how their strategists and decision-makers think. Competitor analysis is the process of identifying and analyzing your competitors and how they compare to you. Competitor analysis is an in-depth examination of your competition's strengths and weaknesses to see how your business compares. When you identify competitors, you have three types to consider: direct, indirect, and replacement. Direct competitors are the businesses that sell a similar product or service in the same category as you. Indirect competitors are the businesses that sell a product or service in the same category as you, but it is different enough to act as a substitute for your product or service. Replacement competitors are the businesses that sell a product or service that is both different in category and type than you, but one which your customers could choose to spend their money instead.
5. Concept Development: Concept development is a process of developing ideas to solve specified design problems. The concepts are developed in phases, from formless ideas to precise messages in an appropriate form with supportive visuals and content. After completing the market research and understanding what we want to achieve and why, it is time to work on the actual design. Concept development is the last step in defining the product strategy. Ideally, you are trying to develop a concept that provides solutions for the design problem, communicates effectively on multiple levels, is unique (different and exciting), and stands out from the materials produced by the competitors. A Concept has three types of attributes critical, non-critical, and shared. Critical attributes are always present. Non-critical attributes are present sometimes. Shared attributes are shared with other concepts.

Key Takeaway: A product strategy sets the direction for the business, aligns everyone around common goals, and reduces waste. Product strategy will empower the product marketing and sales teams to articulate the product's benefits and unique selling proposition. There are five key elements of a winning product strategy; product ideation, market research, identification of customer needs, competitor analysis, and concept development.