What Is A Product Strategy? Definition & Overview

A guide to successful product strategy: how to build one from beginning to end

Creating products that truly delight customers isn’t something that happens overnight or by accident. Behind every innovative product is a detailed and inspired strategy defining the product and how it’s brought to market.

This guide unlocks the secrets to project strategies that work. We’ll discuss the framework behind effective project strategies, how to create a product strategy from scratch, and the different types of strategies you might choose. We’ll also take a sneak peek at how to build your product strategy in monday dev.

What is a product strategy

A product strategy is an action plan that guides the entire product lifecycle, from ideation to retirement. It outlines the goals, objectives, and key initiatives used to develop and market the product and align it with your overall business strategy.

A well-defined product strategy ensures that the product consistently meets your customers’ needs and helps drive growth and profitability for the company.

For a product strategy to be effective, It should answer the following questions:

• Who is the target audience for this product? Dig deeper into their full persona: what they look like, their age, their goals, their challenges. Who exactly is the person that will be interested in this product?
• What specific problem does this product solve? How does the product solve this problem?
• What is the unique value point of this product? How will it stand out next to competing products?
• How does this product connect to a business’s greater goals?

What are the essential components of a product strategy framework?

A lot goes into a product strategy framework, but its success hinges on three critical elements:

1. Vision

A product vision statement is the overarching goal or purpose of the product. It defines what the product aims to achieve and how it will make a difference in the market. The vision should be clear, concise, and inspiring to guide all decision-making processes throughout the product development journey. You might also include positioning strategies that set your product apart from competitors. For example, the monday.com vision is articulated on our website, outlining specific values and a culture the product wanted to encapsulate.

2. Goals

Product goals are specific targets that align with your overall vision and measure progress toward achieving it. These goals should be SMART (specific, measurable, achievable, relevant, and time-bound). Examples of product goals include increasing market share by a certain percentage or launching new features that address customer pain points.

3. Initiatives

Initiatives are high-level objectives within your product strategy that provide structure within your project. For example, your product initiative might be to expand into a new market or integrate with another product to enhance functionality.

Why is it important to have a product strategy

We all know the old, frustratingly true saying, “when you fail to plan, you plan to fail.” And while it may seem obvious, sometimes we forget the striking value in the simplicity of a properly thought-out strategy. A product’s success isn’t a coincidence, but the result of intricate, highly thought-out planning — planning built on proven research, statistics, and specific pain points and goals.  To sum it up, a solid product strategy is important because it:

1. Keeps your team and organization aligned toward a common goal.
2. Provides a roadmap for developing your product ensuring that resources are used efficiently and effectively.
3. Attracts investors or stakeholders by demonstrating a deep understanding, a clear vision and plan for your product’s future. Stakeholders are more likely to believe in your product and provide you with the resources to bring it to life.

What are the different types of product strategies?

Choosing a specific product strategy will depend on your product’s lifestyle stage, market conditions, and business goals. Some of the most common types of product strategies include:

• Cost strategy: Companies like Walmart offer products at the lowest possible cost to gain a competitive advantage in the market. The strategy often involves sourcing products in bulk, reducing overhead costs, and passing savings onto customers to attract a large market share.
• Focus strategy: By targeting a certain market segment with a specialized product, companies can establish their brand and differentiate themselves in the industry. In the case of Tesla, this strategy has catered to environmentally conscious consumers willing to pay a premium for sustainable, high-end electrical vehicles.
• Quality strategy: Companies like Apple opt to develop high-quality products that deliver the “wow” factor. They understand that customers will pay a premium price for high-end products that meet and exceed consistently high standards of performance and design aesthetics.
• Service strategy: Exceptional customer service and support are other ways to win votes with personalized assistance and fast problem resolution for your target market. For example, online shoe and clothing retailer Zappos offers free shipping, a 365-day return policy, and a highly responsive customer service team.
• Differentiation strategy: This strategy involves creating a unique product in terms of features, design, or functionality—something that makes Dyson Ltd. stand out in the home appliance market. The company’s vacuum cleaners, fans, and hair dryers boast unique technology and design features, emphasizing superior performance and allowing Dyson to command higher prices.

What is an example of a product strategy

Look no further than IKEA to see what a successful product strategy looks like in the wild. The Swedish furniture giant employs a cost strategy to dominate the global home furnishings market. IKEA significantly reduces shipping and storage costs by designing products for flat packing and self-assembly.

Combined with large-scale production and efficient supply chain management, this allows IKEA to offer a wide range of stylish and functional furniture at low prices. IKEA’s approach appeals to cost-conscious consumers and supports its vision of making well-designed, sustainable home furnishings accessible to as many people as possible.

8 steps to formulate a killer product strategy

Ready to build your own product strategy? Let’s look at the specific steps involved, from the initial idea to the final product:

1. Identify a gap and research your target market

Even an excellent product will be a fail if no one wants to buy it, so market analysis is critical before developing your product strategy. Learn your customer’s pain points and identify a need to address or a problem to solve, otherwise known as a gap in the market. The aim is to create a product that bridges this gap. Start by:

• Getting feedback from current customers
• Researching the competitive landscape
• Monitoring industry and market trends
• Hiring another firm to do market research for you.

2. Brainstorm potential products

The next step is to brainstorm ways to meet customer needs with your product. Using a collaborative workspace, encourage everyone to pitch their ideas for possible products and the features each product might contain.

Along with generating product and feature ideas, focus on product differentiation. Consider how your product will stand out against similar offerings from competitors.

3. Define your vision, goals, and initiatives

Your vision serves as a guide for your product by mapping out the long-term results you want to achieve. For example, you might want your cleaning product to be a household name and stocked in major grocery stores throughout your region.

Ensure your vision is backed by facts and realistic expectations, and always obtain buy-in from your organization’s stakeholders to support your progress. Next, set concrete goals and monitor each KPI as you iterate on your product.

4. Create your minimal viable product

To ensure your product fits the market, kickstart the development process by creating a minimum viable product (MVP). Your MVP only needs to accomplish its core function, so ditch the extra bells and whistles that waste time and resources at this stage.

5. Establish market fit

Use product testers to explore how your MVP fares in the marketplace. This is an opportunity to work with people who form part of your target market and learn about their experience with your product. To maximize the value of this process, give your product testers free access to the product for a specific duration. Reiterate how valuable their feedback is to make sure they feel comfortable sharing their thoughts with you, which might include:

• Ideas for new features or functions
• What they like about the product
• What they think is unnecessary or doesn’t work as expected
• Whether they would recommend the product to their network

6. Analyze market feedback

Tester feedback is a marketing gold mine. You’ll learn all your target customers’ pain points and feelings about your product. But more importantly, you’ll understand how your customers talk about these things.

Review your feedback to understand if your product is on track to meet your goals. For example, if many of your testers mentioned the same drawbacks, this is a strong indicator that you should adjust your product to address these points. Additionally, note any positive feedback to build on the parts testers liked. This is powerful information to use in marketing materials and sales copy that can forge a stronger connection with your prospects.

7. Iterate

After sifting through your feedback, list out potential product changes. Before you begin building them, however, you should build a backlog, especially if you follow an Agile methodology like Scrum. This centralizes everything you need to create and clarifies what team members should work on. monday dev, for example, is an easy-to-use software that allows teams to create and track their backlog with ease.

Once you iterate, return the product to the market and gather more feedback. As a best practice, continuously adjust your product strategy as you gather more insights and iterate.

8. Optimize price

Consider adjusting your pricing based on your product’s value and the demand you see for it. Setting an initial price is challenging—go too low, and you could leave money on the table; too high, and you could price yourself out of the market. Ultimately, your product’s value justifies what you’re charging while maximizing profits.

Create a robust product strategy in monday dev

monday dev offers a central platform to organize your entire product strategy from start to finish. Here are the core features that enable your teams to plan, develop, and launch your products smoothly.

• Sprint planning: Ensure every sprint moves the product closer to the desired market position, whether that’s through innovation, quality improvements, cost reduction, or entering new markets.

• Burndown charts: Track sprint progress and compare it to ideal progress to identify potential problems in your product strategy.

• Integrations: monday dev integrates 72+ other tools in your tech stack, enabling you to sync data with critical development systems like GitHub, Jira, Figma, and more. Once connected, you might set up simple automations like adding board items in monday dev when a new issue is logged in GitHub.

• Collaboration: Product strategy relies on collaboration between developers, marketers, designers, and other team members. monday dev offers a variety of ways to communicate and collaborate on projects, from brainstorming and commenting on board items to pulling in conversations from email, Slack, or other messaging channels. With monday dev, everyone has visibility into what others are working on, making it easier to align efforts toward the same goal.

• Ready-made templates: Short on time? Choose from a selection of pre-built templates for roadmaps, sprint planning, bug tracking, feature requests, and more to set your strategy on the path to success.

Ready to kickstart your product strategy planning? Take a free demo of monday dev today.