Structured thinking to formulate a Product Strategy

by: Mahatma KPosted on:

Talk to any Corporate Leader you would invariably come across the word ‘Strategy’ in his conversation. Listen in to any conference call on Company’s results, you will hear the word ‘Strategy’ often. 

The strategy appears to be a fancy term used only in corporate. But, it is not verbiage that is just attributable to corporations, it applies to Products, Sports, Films, Politics, and for that matter human life as well. 

What actually is Strategy? Where does it fit in the broad scheme of things like Vision, Mission etc. In this blog post, we are going to talk about Strategy in general and Product strategy in particular and how one can develop structured thinking to formulate a product strategy.

Strategy is a well-brainstormed and actionable approach to achieving long-term goals.

Formulating Strategy is a subsequent stage after the Vision and Mission are drafted. Since this post is about Product strategy, let’s deep dive to see if there is a method to brainstorm and formulate one.

The first and foremost thing to start with is the goal or objective. What do you want to achieve with your product? Also known as Business objective.

Business Objective:

This is the foremost step where you illustrate what is your goal as a company or a product. Since we are particularly talking about ‘Products’, let’s talk about some possible business objectives for a digital product. Here are a few if not all.

Typical Business Objectives for a Product:

  1. Take the new product to the market. aka GTM
  2. Enter a new market with the existing product aka Market Entry
  3. Grow the revenue of the product? aka Product Growth
  4. Price the new Product?
  5. Monetize a specific part or in general the entire product? aka Product Monetization

Once you formulate your business objective, then you attempt to understand your Product/Company strengths in detail. Here are a few dimensions to think about in this regard.

As-Is Capabilities:

  1. How does the Product make money today?
  2. What are the different revenue streams?
  3. What are the core Strengths, Weaknesses, Opportunities, and Threats?
  4. What are the existing strategies that are being employed?

The next logical step is to define the landscape. The landscape study includes the following thinking dimensions:

Define the Landscape:

  1. Key Players in this space and their market share
  2. Technology trends in which your Product is operating
  3. Market Trends shaping up
  4. Regulation
  5. Total Addressable Market (TAM), Total Serviceable Market

Now that you understand the Market landscape, the logical next step is to learn what it takes to flourish in your objective – The secret sauce.

The secret sauce for success:

  1. What are the capabilities needed to succeed in fulfilling the objective?
  2. Identify the delta capabilities
  3. What is the plan to address the gaps?

Let’s summarize what we’ve learned so far. We started with a Business Objective, assessed the SWOT, studied the landscape, and comprehended the secret sauce of succeeding in our objective.

The following logical step is to arrive at strategic solution options. This is where you spend most of your time and is the meat of the entire exercise.

Once you layout your solution options, the next step is to prioritize one of the strategic solution options. The prioritization is typically done by considering the following factors.

Prioritization criteria for options:

  1. Cost
  2. Risk
  3. Chance of Success
  4. Impact
  5. Complexity
  6. Tradeoffs

Each of the below factors can be assigned a weightage and each of the solution options is assigned a score against each of these factors and an aggregate weighted score is computed at each solution option level. The one that gets the top score is our way to go.

Last but not least is the fallback plan. If things may not move as intended and hence there should always be a plan B to fall back and that acts as a cushion in tough times.

Summarizing all the above and arriving at a mind map that is easy to comprehend.

Mind Map for Product Strategy:

  1. Define the Business Objective
  2. As-Is capabilities
    1. Business Model
    2. Revenue Streams
    3. Existing strategies
    4. SWOT
  3. Define the landscape
    1. Market Competition & Key Players
    2. Technology
    3. Regulation etc
  4. The secret sauce for success 
  5. Strategic Solution options
  6. Pick one from your strategic option set based on prioritization criteria
    1. Cost
    2. Risk
    3. Chance of Success
    4. Impact
    5. Complexity
    6. Trade-offs
  7. Have a Fall-back plan