Product strategy as your competitive advantage

More than ever, your digital product strategy holds the key to your competitive advantage.

Product strategy | Red Badger

“Strategy is a process, not an event. Organisations make their strategy 24/7”
Clayton Christensen

Admiral Lord Nelson famously took on a fleet of Franco Spanish ships in 1805. He was under resourced but won the battle, sinking 22 enemy ships without losing a single one of his own.

During the battle, Lord Nelson went against the prevailing war tactics by exploiting the accepted practice of lining up parallel to the opposing fleet. He surprised the Spanish by splitting his own ships into 2 lines and directed fire from them perpendicularly towards the opposition.

Strategy in business, fortunately, does not result in bloodshed but we often face problems which seem difficult or impossible to overcome just as Lord Nelson experienced.

It is clear the word ‘strategy’ we use in business, like so many other words, have a set of related meanings and resulting approaches that can lead to confusion and a lack of clarity.

I accept that the word strategy can be appended to myriad business approaches, but for the sake of simplicity, I have taken the liberty of identifying the main three.

Level 1 - Corporate strategy

Generally speaking, you see this type of strategic work being carried out by ‘Tier 1’ consultancies working with large organisations, spending time with people at the top of a corporation. They seek understanding of the business environment and help to evaluate and articulate specific challenges and go on to create guiding policies or approaches to tackling identified problems.

Strategy should have coherent, actionable tasks that help deliver on the guiding policies. These 3 core elements (diagnosis, guiding policies and coherent actions) make up what renowned strategy expert Richard Rumelt calls the kernel of the strategy. Corporate strategy tends to have more of a focus on the wider situation and likely impact from competitors.

Level 2 - Brand Strategy

Brand strategy concerns itself with how a company represents itself outwardly (and inwardly). Brand strategy embraces and communicates a company's values, vision and purpose and helps identify what the current state of organisation is, where it wants to go and how to get there. Vision is the destination, purpose, is the vehicle to get there. As Jeremiah Gardner says, “branding is a relationship between an organisation and an audience.”

Branding is positioning and articulation of the positioning.

Level 3 - Product Strategy

Where corporate strategy concerns the macro, product strategy focuses more on individual products and services (or groups of them). What exactly are the problems we are trying to solve and how do potential solutions address them?

In order to build a successful product strategy, you need to consider many critical factors encompassing  your customers, your business resources and technological opportunities available. A good product strategy will help you make carefully considered decisions about the direction of your product based on tested hypotheses about your product, service and/or customers.

The realisation, driven home by the success of digital native companies, is no matter how robust your high level corporate strategy or brand strategy is, if your product strategy is weak or flawed, your product will still fail.

When there is a lack of product strategy

A well recognised example of how a lack of product strategy can cause failure, despite strength in other areas, is the Amazon Fire Phone. According to this article, the blooper has caused millions of dollars in losses.

Very interesting to see that such a successful company can make such large mistakes, fortunately, it can afford it. When looking into more detail it is easy to see that if Amazon had invested just a matter of a few weeks into some product strategy their losses would have been minimised or better still, the product could have been successful. For example, what applications are important to the potential customer profiles of phone users?.. and how much are they willing to pay?

A second, well known case of a product that flopped due to a lack of product strategy is Segway.

Understanding how the product is going to be used and what problems it solves is critical for a success of a product. Segway famously overhyped the product before launch and ended up failing to live up to expectations. On top of this Segways were not allowed to be used on public roads and even some pavements and cycle routes were off limits.

“The largest source of waste[...] is building a product that no one will find useful”Eric Ries, The Lean Startup

These cases could have been avoided had they spent some time to consider their core value proposition in relation to their customer segments and tested their ideas to validate assumptions they made on the way to market. This is oversimplifying the issues somewhat, but the core message remains.

Even if you have a solid corporate strategy and an established brand, you still need a great product strategy.

What products or services can you think of that have failed? And how would you do things differently next time?

If you'd like to chat about how we can help set your product up for success, get in touch.

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