By defining these three things, you will have a basic product strategy. When you go in-depth on these three components, you will have effectively built a product strategy framework.
Define your vision
Your vision should encompass several factors, such as the overall strategy of your company, the outlook for the product, and how those two things can and should work together.
When defining your vision, you need to identify your target audience and the business opportunity your product represents. User research and customer research can help you figure out what customer segment might benefit most from your product.
You will also need to identify what problem your product will solve or what features it will have that competing products lack. If you don’t know what your competitors are up to in this space, do the proper research before moving beyond this stage. This process should also help you decide if you have a potential product-market fit situation.
Basically, ask why the product should exist, then answer that question in the clearest and most concise way possible, but by using very detailed data and analysis.
Define your goals
What do you want to achieve with this product? You must answer this question in quantifiable terms. If you can’t put measurements to the goals, then they’re not quite ready for the product roadmap. In addition, you must choose goals you can track and measure.
Define your actions
What will you do to achieve those goals? Specify the actions necessary to achieve your stated goals. How will your initiatives align with the core strategy of your business overall? Remember that your product strategy must also forward the overall goals of the business as well. If your initiatives work against the core strategy of the business, then it’s not a viable product strategy.
Your product vision will inform your product initiatives, which will inform your product roadmap. You will identify advertising and product marketing insights through these strategies as well.
These factors will lead to different product strategies. Some product strategy examples include:
- Product development strategy – For improving on a product or creating a new one.
- Cost strategy – For finding ways to establish cost leadership with a product.
- Market penetration strategy – For increasing sales in an existing market.
- Market development strategy – For moving sales into a new market.
- Differentiation strategy – For finding ways to create a product different in some way from the competition.
- Focus strategy – Leveraging a niche or singular problem with your product.
- Quality strategy – Adding value in the form of better quality to a product and raising its price.
- Diversification strategy – Adding new and different offerings in addition to your product.
- Service strategy – Adding strong customer service features to your product.
Notice how these strategies all offer solutions to specific problems or concerns. Your goals may require you to pursue one or more strategies, but knowing the type of strategy you need doesn’t automatically mean you will know how to go about implementing it.
Various templates, worksheets, and online forms exist to help you figure out the nuts, bolts, and numbers of your product strategy. For specific purposes, it’s a good idea to look at the known and tested product management frameworks that already exist.
Product Strategy Framework Examples
You don’t have to look far to discover there are quite a few product strategy frameworks out there. Frameworks develop as answers to particular problems in business, so there are a lot of them. Many of the more common or popular frameworks can often help a business with a variety of issues.
The Ansoff matrix framework helps companies look for growth opportunities. This framework presents four growth strategies broken into two sets of two, with two strategies for existing customers and two for potential customers:
- Market penetration – Increasing sales of an existing product to existing customers.
- Product development – Introducing a new product to existing customers.
- Market development – Introducing an existing product to new customers.
- Diversification – Introducing a new product to new customers.
Generally, the safest strategy comes with market penetration, while diversification represents the riskiest avenue. You can use this framework to see where risks exist and where you might have some room to grow your business. Developing around any of these strategies can help you fine-tune your product initiatives or gain insight into its potential for success or failure.
The lean canvas
Lean Canvas is a simple yet powerful framework that offers a single-page guide to help a business decide the feasibility of a product. The canvas offers nine fields that offer a perfect place to brainstorm potential problems or bottlenecks that might hold back a product strategy.
On the canvas, you will find the following fields:
- Problem – Problems or pain points for customer segments
- Solution – Solutions to deliver your value proposition to customer segments
- Key metrics – Metrics that apply to the strategy
- Cost structure – Costs associated with solutions
- Unique value proposition – What you offer that others can’t
- Unfair advantage – What advantages you have that can help with the strategy
- Customer segments – Target customers
- Channels – How you reach your customers
- Revenue streams – Cost to the customer for the solution
This template helps a great deal with ideation as you try to figure out the aspects of your product strategy. Fill in the blanks and reevaluate things. Make changes and look at the big picture again. You can use this framework to easily spot areas that, with some adjusting, can make your product strategy viable.
Blue Ocean strategy
The Blue Ocean product management framework facilitates new business opportunities. The concept relies on a metaphor that includes red oceans and blue oceans. Red oceans contain a lot of competition and journeying into those waters can require far too much effort with no real gain for many businesses.
Blue oceans, by contrast, consist of uncontested avenues that businesses can create and sail into. The goal of Blue Ocean strategy is to take advantage of new markets rather than spend time fighting for space where the competition holds too much ground already. To achieve this, Blue Ocean strategy leans heavily on the concept of value innovation.
Value innovation involves redefining a market to create a new one; a Blue Ocean. By creating an uncontested market, competition becomes a nonissue. In that new market, your business can create and capture all the demand. During this process, your business can offer more value for a lower cost, which effectively kills the cost and differentiation tradeoff.
This strategy works by focusing on what customers want, discarding what they don’t want, and creating a product that fills that need. In this way, it’s possible to create a new type of customer or new market altogether.
The Blue Ocean strategy does require additional strategies to implement. The most common means of leveraging Blue Ocean as a product strategy framework is with the Four Actions Framework.
- Raise – What factors can you raise beyond the industry standard?
- Eliminate – What can you eliminate that can reduce costs and redefine the market?
- Reduce – What can you reduce below the industry standard?
- Create – What can you create that isn’t part of the industry standard?
This framework can grow complicated, but you can find many canvases and templates to help develop and visualize a Blue Ocean strategy.
A Blue Ocean framework can help create a product strategy geared toward offering something new or creating a market and demand where one didn’t already exist. This type of framework can work well for businesses or brands looking to bring something innovative into the market.
The business model canvas
The business model canvas actually looks and works a lot like the lean canvas. That’s because the lean canvas is actually the business model canvas with Lean aspects laid over it. The nine components of the business model canvas include:
- Key partners – What other companies are part of development?
- Key activities – What must occur before you can release a product?
- Key resources – What resources are required to facilitate these actions?
- Cost structures – How much will it cost to facilitate these actions?
- Value proposition – What are you offering?
- Customer relationships – How will you provide value to new customers?
- Channels – Where will you sell or distribute the product?
- Customer segments – Who is the product for?
- Revenue streams - How will your business make money from these actions?
You can use these components to build a one-page look at an entire business model, which was the purpose of its design.
While similar in appearance, you may notice the business model canvas has a larger focus on the business and its interactions with other business aspects around it, especially the customers. Contrast that to the lean canvas which looks more toward solving specific problems to facilitate growth.
A tremendous number of product strategy frameworks exist, and variations of those exist as well. These samples should illustrate the fact that you have a lot to consider when it comes to crafting a viable product strategy. Frameworks can help take out a lot of the guesswork and show you ways to innovate, achieve goals, and new ways to think about your product.
How to choose the right framework for your business
Choosing a framework may require a little trial and error on your part, but it’s worth it. As these frameworks often have clearly stated purposes, it’s possible to narrow down your search for a suitable one from the start.