April 06, 2023
Product Strategy Frameworks: Definition and Benefits
Most businesses, from startups to big corporations, lack a clear understanding of their product strategy or don’t adhere to it continuously. Those who do, like Apple, see earnings soar, with total net sales amounting to $394.33 billion in the fiscal year 2022. Conversely, another tech giant, Google, had many unsuccessful product launches in recent years.
If the size and the type of the company don’t define its product’s success, then what does?
Product leaders need to grasp how product strategy looks and functions to promote their product effectively and build a foundation for many future vital decisions. The strategy must be recorded using a particular framework to ensure that it is constantly followed. It will guarantee that all relevant parties are aware of its implications and ready to contribute to its realization.
This article will define product strategy, explain its importance for your business, and review its traditional pyramid and funnel, comparing them to modern product strategy frameworks with their benefits. We will share Artkai's expertise in implementing product strategy approaches based on success cases, such as DNA Payments and Beverage X.
What Is Product Strategy?
Product strategy fills the gap between conceptualizing a product and formulating a predetermined development strategy. You might have a brilliant concept for the next great thing. You would likely find it challenging to go directly from dreamed up to drawn out on paper. A product strategy lays out the guiding concepts that support the development of the product and the effort needed to make it profitable.
It assists businesses in addressing three crucial issues about their offering:
- Who comprises your customer base?
- What pain points would the product address for your customers?
- In what ways will your business benefit from the product?
The responses to these questions will influence comprehensive product planning. These broad plans outline the product's features, a general path to its development, and the quantifiable goals the organization aspires to.
Product strategy is your reference point. During the product development process, deadlines, tasks, and goals will all inevitably change or be altered entirely in response to customer input, testing, and unforeseen challenges. A business that follows a predetermined strategy can better manage changes and come up with solutions consistent with the product's long-term goals.
The Importance Of Product Strategy To Your Business
Your business will gain from product strategy because it maintains a product's trajectory in line with both internal and customer expectations. It helps your business to:
- Choose a niche for your product;
- Develop your product roadmap;
- Provide internal teams with direction and clarity.
Choose a Niche for Your Product
Thanks to a well-researched product strategy, companies can identify the market niche their product will fill once it enters the market. Teams can make choices during development that speak to the product's target market by being aware of this niche. Your clients, business objectives, and product characteristics may all be balanced with a product strategy.
Develop Your Product Roadmap
Your product roadmap serves as the official game plan for creating, rolling out, and expanding your product. It serves as a business's ultimate task management tool and ensures that due dates are honored. By providing a solid base, product strategy directly influences your product plan. While your roadmap will outline the precise execution procedures, your strategy will identify high-level milestones and phases for the development of your product.
Provide Internal Teams with Direction and Clarity
Everyone at your organization strives to make your product successful. To maintain consistency in communications, internal procedures and plans for interacting with customers should all center on the ideas presented in your product strategy. Your company's teams might not always agree on the best path for the product. When in doubt or disagreement, teams should refer to the product strategy to establish which course of action best reflects the goal of the product.
The Traditional Product Strategy Pyramid
Traditionally, a pyramid has been used to represent product strategy. This approach, however, fails to adequately describe or show what a product strategy is or does. Pyramids begin at the base rather than the top.
Supposedly, vision, and mission are at the top of the pyramid because they are the most significant. On the other hand, the foundation of a pyramidal building is the most crucial component. Then a tactical action like roadmapping shouldn’t be placed as the base of the product strategy.
With time the understanding of how to create digital products has changed. Now, product strategies are built based on something other than roadmaps and other tactical methods.
The Product Strategy Funnel
Nowadays, a well-thought-out product strategy is visualized as a funnel rather than a pyramid. The strategy funnel leads the team through each stage with increasing clarity, encouraging them to build continually.
In the product strategy funnel, knowing what actions to avoid is equally important as doing the activities that must be done. Martin Eriksson describes this phenomenon as “the decision stack.” This concept helps reduce decision overload while accelerating decision-making and aligning organizations from top to bottom.
In the decision stack, well-known components like product vision and objectives are only the decisions that assist us in reducing our options. Steve Jobs has also adhered to a similar approach defining focus not as saying “yes” to particular things but saying “no” to other thousand good ideas.
A Modern Product Strategy Framework
Considering the above, what does a modern product management strategy framework look like? It is a funnel-like model that consists of six levels. They are purpose, mission, vision, strategy, objectives, and tactics.
All these concepts should be concise, ambitious, encouraging, and inspirational. They should communicate how your product will improve the world for the benefit of your team, partners, and customers, especially for the higher-level statements.
The purpose statement is defined at the company level, explaining why the company or product exists. It should be broad enough to set itself apart from particular solutions yet narrow enough to convey the company's self-perception clearly. The statement of purpose should be one phrase long at maximum. The purpose should remain unchanged at all times.
The mission is a unifying idea that helps set priorities, promotes development within the organization and helps clarify development strategy. It should answer the question: “How do we intend to achieve our goal?” The purpose might never change, but it might if there are major changes in client needs or technology.
A vision statement is an inspiring statement about the idealistic emotional future of a product. It outlines your final product if we fulfill our purpose and mission statements.
Your product vision statement is intended to provide continuing guidance and motivation to the team. A vision could last for several years and evolve gradually. Aspirational goals are included in a good product vision statement.
The strategy statement summarizes the objectives we will review below in the “Objectives” section. If there are three objectives, the strategy statement should be a single, concise definition. It should be one to three sentences long.
Your strategy should evolve more often than the vision, for example, biannually. The strategy for a single product can alter once per year or, most often, every few months. It is a corporate-level strategy it'll be more resilient.
Objectives can be seen as a stand-in for the goal-setting framework you ultimately decide on. You might have workstreams, SMART goals, OKRs, BHAGs, strategic themes, etc. Whatever product metrics you decide to emphasize, they should be measurable and well-considered. The core of your strategy is this group of these strategic goals.
When it comes to providing value to your customers, objectives are essential but only useful if they align with your product's vision, mission, and purpose.
Tactics are the work that empowers product teams to produce to raise metrics and advance toward their goals. Any scrum ceremonies or artifacts reside here. The daily standups, demos, iterations, roadmaps, discovery, experimentation, epics, user stories, user research, and brainstorming are further examples. These are the routine tasks that agile product development teams carry out to provide useful features and software.
What do tactics mean for teams? Each project, epic, experiment, and customer problem that a team works on should support a goal for a given product or business. It aids in prioritization and provides teams with a foundation to question requests that don't advance the company's objectives.
Benefits Of A Product Strategy Framework
A modern product strategy framework aims to promote the following advantages that your business will benefit from:
The modern product management strategy framework aims to eliminate pointless possibilities. Each layer reduces our options and enables us to concentrate on providing value to clients without being distracted.
Businesses can devote their resources to creating features for a particular market segment by focusing. The ultimate result is a product that excels in a specific market rather than underwhelming a more extensive market by offering something for everyone.
This strategy model's components are all small and have distinct functions. They can be divided into smaller parts and utilized in various presentations, business cases, etc. On the other hand, the statements can be merged and presented as a single unit to give a concise overview of the company's approach.
The guidelines governing the length of each statement are the ones to which you should pay the most significant attention. If members of your teams and other stakeholders cannot clearly recall or state your vision, you lack a vision. There is no strategy if people are unable to remember it. If nobody reads a purpose, mission, and vision white paper, they don’t function.
Definition of Purpose
Most strategy frameworks don't distinguish between purpose and mission, and many businesses don't differentiate between vision and mission. One of the main advantages of this paradigm is that it defines purpose, mission, and vision as separate decision-forcing statements.
Artkai is a customer-centric digital product development agency providing end-to-end product delivery services. We use a modern product strategy framework to guide businesses from idea to software launch. With our cutting-edge, custom software solutions, you can enter the future of business operations. Artkai handles all design and development from day one to the successful deployment of your software product. Let’s look at some of our success cases.
Beverage X: A Cloud-Based Inventory Solution
BeverageX aimed to develop a cost-effective inventory solution that will streamline processes and stimulate the expansion of the alcoholic beverage sector. The Artkai team was challenged to build a cloud-based application that will process and automate the work of wholesalers, retailers, and suppliers, enable large and small retailers to buy private labels and create a successful onboarding procedure that will allow dealing with remote orders within a week.
Artkai has structured the work at the project into three main stages: planning and analysis, execution, and client reviews. We introduced an effective cloud-based inventory solution that connected retailers, distributors, suppliers, and brands. It enabled complex product management, crowdsourcing for private labels, and close sales and market trends monitoring.
DNA Payments: An Intelligent Payment Ecosystem
DNA Payments Group, one of the biggest omnichannel payments companies in the UK and the EU, contacted the Artkai team and requested that we redesign their current interface. For businesses to grow and make more money, the website must be completely updated to benefit existing users and draw in new ones.
Our team completely redesigned the portal's core elements, introducing an intelligent payment ecosystem, significantly affecting the results. By the end of 2022, DNA Payments served over 65,000 merchants. Following its redesign, the site now provides rapid, safe, and easy-to-use payment alternatives for every location, both online and offline.
Thanks to the Artkai team's joint efforts, the clients achieved the following outcomes:
- x2,3 reduced churn rate;
- +18% of new users in the first month after the portal's redesign.
Design A Winning Software Product with Artkai
Product strategy frameworks bridge the gap between envisioning a product and creating a predetermined development strategy. A company that adheres to a product strategy can better manage changes and provide solutions that align with the product's long-term objectives.
Product strategy will help you define a product’s niche, create a roadmap, and provide direction and clarity for your teams.
Artkai implements the best practices of modern product strategy framework implementation to develop cutting-edge software products from scratch. Even if you are still unsure of your exact software product requirements, our experts will guide you through the digital innovation process by providing top-notch technologies and working with you to build a successful product.
Contact us to discuss your product's end-to-end development.
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