The Straightforward Guide to Product Strategy

Did you know that potato chips were invented by thinly slicing French fries? Did you know that Play-Doh was designed as a cleaning product before children started using it for fun?

It’s true. The products became lucky household items.

Not every successful product is an accident. You can make a product successful by developing a good strategy to guide it.

We’ll discuss what product strategy is, how it can be used to create different types of strategy, and provide some examples from the business world. Then, we’ll give you a template that you can use to create your own strategy for your next product or feature.

What Is Product Strategy?

Your product strategy is the plan that is used to create your product or feature. To achieve your business goals, your team needs to complete all of the necessary tasks. This document will be your team’s guide, and they will refer to it anytime they have questions. 70% of businesses say that the product strategy is the most important thing to consider when making decisions. It is important to create a detailed and thorough strategy to ensure that every task is completed correctly and on time.

The product strategy outlines how the business will benefit from the product. This product will solve the problem of customer frustration and the impact that it will have on the company. By providing a more efficient way for customers to interact with the company, it will reduce the number of customer service calls, which will in turn reduce costs. The strategy should be clear in order to create a product definition, explaining what to build and when. The product strategy is a plan that you will use to measure your success before, during, and after you have produced your product.

A product strategy consists of three major components. Let’s review each one in the sections below.

Market Vision

The market vision is a description of your target market and what opportunity the market presents for your business. It highlights your target customers, how you’ll position your product, and how it’ll fare against other competitors in its space. Your market vision should also include a go-to-market plan that explains your potential customers’ needs and how you plan to deliver a competitive offer.

Product Goals

You can’t create a product strategy without key objectives. What specific goals or metrics do you hope to achieve by building your product? Your development team will be guided by them and you will be helped to measure success once the product is released.

When goal-setting, it’s important to give yourself a timeline for when you’ll accomplish your objectives. This urgency will help motivate you to complete your goals. Adding a time constraint to a product’s success makes it more important to develop the product.

Product Initiatives

Product initiatives are ideas or plans that are similar to product goals, but they are more abstract and not as concrete. Your new product will have a big impact on these broad ideas or trends.

For example, when HubSpot launched its CRM, its goal was not simply to sell software. The company wanted to share its expertise in marketing automation and help its users find new business opportunities. The product’s impact on the bigger picture helped establish a clear vision for how HubSpot would create and develop its tools over time.

Now that we’ve looked at product strategy in detail, you should know the main elements that go into making a product. The way in which you organize information can be different depending on the product you are making or what management is expecting.

Below, let’s take a look at some of the different product strategies you can use at your business.

Types of Product Strategies

Cost Strategy

A cost-effective strategy focuses on creating the best product possible while keeping the price low. It reviews the resources used and determines how production can be more efficient and cost-effective.

A useful strategy for low-effort purchases is to buy household cleaning items in bulk. We don’t think too much about these things when we’re buying them because they’re all essentially the same and we don’t have any particular loyalty to one brand or another. If you can create a product that is cheaper than your competitors’ products, it will be a favorite among your customers.

Differentiation Strategy

Price isn’t the most important thing when it comes to making your product different. There are many other ways to make your company stand out in your industry. The product might be a luxury item that is made with high-quality materials. It could have revolutionary features that change the way the field operates. This approach focuses on making your product memorable and delightful to customers by giving it a personality.

Focus Strategy

If your company wishes to create a product that will have high appeal to a specific customer base, then you may want to consider creating a product that appeals to one specific buyer persona. A personalized solution is created for a select group of people that meets their specific needs. This is a great way to gain brand loyalty when expanding your customer base.

Quality Strategy

If you want your product to stand out from the competition, consider the make and brand. The quality strategy focuses on providing customers with the highest quality product possible. Even though the prices are high, some buyers still purchase the items. Many people will be willing to spend extra money on something they see as a luxurious item if they believe it is a good investment.

Service Strategy

Many customers may be looking for a certain product, but the customer service provided by the company selling it will likely be the deciding factor in their purchase. There is a lot of value in having a good reputation with customers when it comes to business. Companies that know how to use this to their advantage can use great services to bring people in. By responding quickly and providing better after-sales service, you can build brand loyalty that will last in any market.

Proactive strategies

Companies that use proactive product development strategies are more likely to make a technological or scientific breakthrough. Here is what these companies do:

Reactive strategies

Companies who use reactive product development strategies focus on changing their products to compete with others in the market, rather than responding to changes. Here is what these companies do:

Reasons to Create a Product Development Strategy

Some startups refuse to develop product strategies and only use roadmaps. Product strategy has numerous benefits that make it a useful tool for development and business as a whole. Here are some of them:

Now that you product development strategy is and you need one, let’s look at the types of strategies you can choose for your product.

Key Steps When Creating a Product Development Strategy

Perform research

You can’t just create a product development strategy without knowing what the product will be surrounded by. You need to look into the context the product will exist in before you start working on the strategy. Start with:

Customer research

A study can help you detect slight changes in customers’ moods and behavior, even if you have created a development strategy for an existing product and know who your customers are.

Competitor research

You need to know your rivals’ offers in order to create a value proposition that sets you apart from them and always puts you one step ahead. The study can help you detect weaknesses in your competitors that you can exploit for your own gain.

A SWOT analysis will help you understand your competitor’s strengths, weaknesses, opportunities, and threats. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. You can use this analysis to help you figure out how your competitors are faring in the market and what you can do to improve your own products.

Market and macro environment research

All of the external factors that could potentially affect your product or industry in the long or short run. This includes economic, technological, political, and cultural factors. This research allows you to detect aspects that can influence your product development strategy significantly, such as:

Form your business model

Companies are generally expected to aim for and achieve financial goals such as making a profit and increasing ROI. To create an effective product strategy, you need to have a shared understanding of how your product or service will generate revenue and help to achieve your business goals.

There are many options for monetizing your product, such as subscription, freemium, advertising, commercial partnerships, etc. The choice of business model should be based on the type of product, customers’ preferences, and market conditions. If your product is new, it might be a good idea to use a strategy where users don’t have to pay to use it (e.g., advertising, partner ads). If your product has a lot of users and is generating revenue, you can implement a model where users pay for it.


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