Recently someone asked me, ‘But what’s the difference between our business and product strategy?’. I realised that this was a common question, especially when new product hires are onboarded at start-ups and have to articulate their value to the organisation.
Having a clear and well-defined product strategy is essential for success. It acts as a roadmap that guides your product development efforts, aligns your team’s efforts, and ensures that your product meets customer needs and market demands. However, it’s crucial to distinguish between a business strategy and a product strategy, as they serve distinct but interconnected purposes. In thispost, we will delve into the construction of a robust product strategy, using real-world examples to highlight the differences between business and product strategies.
Understanding Business Strategy vs. Product Strategy
Business Strategy
A business strategy is a high-level plan that outlines an organisation’s goals, objectives, and the overarching approach to achieving them. It encompasses various aspects of the business, including market positioning, competitive advantage, target markets, and financial goals. Business strategies often span several years and are relatively stable, providing a broad framework within which the organisation operates.
Example: Amazon
Amazon’s business strategy is built on customer-centricity and market dominance. They prioritise long-term growth and innovation, often at the expense of short-term profits. Jeff Bezos famously articulated their approach with the mantra “customer obsession over competitor focus.” Amazon consistently invests in logistics, technology, and Prime memberships to reinforce this strategy.
Product Strategy
On the other hand, a product strategy is a subset of the business strategy that focuses specifically on a product or product line. It defines how a product will fulfil the broader business goals, including the target market, value proposition, feature prioritisation, and a roadmap for development and growth. Product strategies are dynamic and may evolve more frequently than business strategies to adapt to changing market conditions and customer feedback.
Example: Apple iPhone
Apple’s iPhone product strategy exemplifies how a product can contribute to the overall business strategy. While Apple’s business strategy revolves around creating a seamless ecosystem of hardware, software, and services, the iPhone is at the heart of this strategy. Each iPhone iteration is designed to improve user experience and drive customer loyalty, further strengthening Apple’s brand and ecosystem. Apple are fiercely protective over this strategy and the associated interpolation with the other products in their ecosystem – e.g. lightning connector, iMessage. However over time Apple will have to examine other product strategies in order to keep their overarching business strategy of beautiful simple products (Software / Hardware) that people love to use and pay more for. Perhaps their Vision Pro product is a hint of what’s to come?
Constructing a Robust Product Strategy
1 Market Research
Understand your target market thoroughly. Identify customer needs, pain points, and preferences. Analyse competitors and market trends to uncover opportunities and threats. I cannot stress this enough – you’ve really go to live and breathe your users, the market. Be part of this work yourself regardless of your team or research department.
Tip: Use market research tools and services like Nielsen, Statista, and customer surveys to gather valuable data.
2 Define Clear Objectives
Set specific, measurable, achievable, relevant, and time-bound (SMART) objectives for your product. These objectives should align with your business strategy and address the identified market needs.
Example: Increase user engagement by 20% within the next six months.
3 Prioritise Features
Prioritise features and functionalities based on their potential impact on achieving your objectives and satisfying customer needs. Consider using techniques like the MoSCoW method or the Kano model. Do NOT keep building features as a checklist believing that you’re achieving anything. IMPACT alone determines value to the business.
Tip: Continuously gather user feedback to inform feature prioritisation.
4 Create a Roadmap
Develop a product roadmap that outlines the timeline for feature releases and updates. This roadmap should align with both your business strategy and your product objectives. Remember – a roadmap is just a guide and do not overload it. Be ambitious but realistic. Set stretch goals that could barely be achievable but are not impossible – you’ll reach somewhere in between where you’re at now and the North Star.
Example: Launch a new mobile app version in Q4 2023 with enhanced user onboarding and navigation.
5 Monitor and Iterate
Regularly monitor key performance indicators (KPIs) and gather user feedback to assess the product’s performance. Iterate on your strategy and roadmap based on these insights to stay aligned with market demands.
Tip: Use analytics tools like Google Analytics or Mixpanel to track user behavior and KPIs.
6 Communicate and Collaborate
Ensure clear communication and collaboration among cross-functional teams, including product management, development, marketing, and customer support. Transparency and alignment are crucial for successful execution.
Example: Conduct weekly cross-functional team meetings to review progress and address roadblocks. You can do this with your design team – at Healthily where I was CPO, our Head of Design Josh ran weekly ‘Design Jams’ – anyone could join and it kept everyone up to date.
7 Stay Agile
Be ready to adapt to changing circumstances. Agile methodologies, such as Scrum or Kanban, can help your team respond quickly to new information and market shifts. But do NOT be a slave to these – you’ll find your unique way with your team that works.
Tip: Consider implementing Agile project management tools like Jira or Trello to facilitate collaboration and tracking.
Thoughts
Constructing a robust product strategy is vital to your organisation’s success. Understanding the difference between business and product strategy is fundamental, as they work in tandem to achieve overarching goals.
Keep iterating, keep speaking to users and communication within your organisation and you’ll be on your way to growth and innovation. Building a successful product strategy is an ongoing process that requires adaptability and a commitment to meeting customer needs. Use data well, be nimble in decision making and make sure insights inform your direction so you remain valuable and relevant.
Use the G/A/I/N framework to help you kickstart your product strategy today 👇
