Which of the following is one of the key characteristics of a product development strategy

A Product Strategist identifies new opportunities, assesses the company’s product performance, and helps develop its long-term strategic plans for future product lines. This distinguishes the role from the Product Manager (PM), although the two will work together. Whereas the PM is responsible for the market success of specific products, the product strategist takes a broader view, using research and analysis to guide the company’s overall product plans.

In some companies, product strategists are part of the product management team. In others, they report to marketing.

Note: Product strategist roles tend to be created only in large enterprises. Most companies do not have the budget to create a standalone position. Instead, these responsibilities generally fall to the company’s PMs.

What Does a Product Strategist Do?

The responsibilities of a product strategist overlap in several areas with the role of a product manager. They both learn about their user personas, identify market opportunities, and communicate product strategy to stakeholders. But in companies able to create a dedicated position, that person will typically focus on a few high-level initiatives.

Research and analysis

Product strategists research both their company’s performance and the competitive landscape to find unserved needs and market opportunities.

Rather than focusing on specific products a market is missing, they look for problems that need solving, or list for common complaints from their target market. Any of these could represent a strategic opportunity for the company to exploit.

Strategic planning

Product strategists must think about all aspects of their company’s products: pricing, marketing, developing strategic partnerships with other businesses, etc.

When a company is preparing a new product for launch, for example, the strategist will already be identifying business partnerships to extend both the company’s reach to new users and the value of the product itself.

Positioning the business for success

According to CareerMatch.com, a product manager focuses on where the product is today. Product strategists spend most of their time and energy planning where to take the product tomorrow. This means that the responsibility of the product strategist is to focus their time and energy on planning where to take the product tomorrow.

A key aspect of the role is to think about the future of the company’s products. They develop plans for a product’s lifecycle, for example, and keep an eye on the market for potential changes that could represent new opportunities, threats, or needs to alter the product in some way.

3 Key Traits All Product Strategists Should Have

Product strategy and software development firm Venturesoft urges its product strategists to “challenge the status quo”. Here are three key traits you should have in order to challenge the status quo and optimize success in the role:

1. Entrepreneurial spirit

As a product strategist, you’ll need to think big and develop innovative ideas. You’ll need to see opportunities where others don’t. And you’ll need to know how to execute on those ideas. In other words, you will need to think and function like an entrepreneur within your company.

2. Data savvy

Effective product strategists, like effective product managers, find insights and opportunities using data—not only their gut instinct. A major part of your job will be gathering and analyzing data from your company’s performance, your users’ interactions with your products, and your competitors.

3. Superb communication skills

To succeed, you’ll need to communicate with different people and teams across your company, as well as people outside the organization. You’ll need a strong working relationship with the development, sales, and support teams, for example, to gain a deep understanding of the company’s products and users. You will also need to know how to effectively communicate a proposal for a new market or product to your executives or investors. With all of these responsibilities, you’ll need to develop outstanding communication skills to become an effective product strategist.

Related Terms

product manager / product strategy / product vision / product-market fit / product leadership

Learn More About Careers in Product

A product strategy is a high-level plan describing what a business hopes to accomplish with its product and how it plans to do so. The strategy should answer key questions such as who the product will serve (personas), how it will benefit those personas, and the company’s goals for the product throughout its life cycle.

Why is Product Strategy Important?

Building out a product strategy before you begin development is necessary because it serves three valuable business purposes.

1. A product strategy provides clarity for your company.

Your team will be in a better position to deliver their best work when you draft and communicate a clear and well-thought-out strategy for your organization.

Your developers will understand how the parts of the product they’re working on contribute to the larger companywide strategic goals. Developers can sometimes feel caught amongst all the details and lose sight of the overarching purpose behind their work. A product strategy clarifies that for them.

Your marketing and sales teams will be able to articulate the product’s benefits and unique selling proposition. However, without a defined strategy behind a product—generating anticipation and sales becomes difficult.

Additionally, your customer success team will better understand your product’s use cases and provide better support for your users’ frustrations.

2. It helps you prioritize your product roadmap.

After you’ve earned stakeholder agreement for your proposal, it will be time to translate that strategy into a high-level action plan and then build a compelling product roadmap.

Unfortunately, many product teams skip the strategy-drafting stage and jump right into listing themes and epics on their roadmap. Without a product strategy to guide these decisions, the team may prioritize the wrong items and find themselves misusing its limited time and resources. When you start with a strategy, you have a clearer picture of what you hope to accomplish with your product and translate it into a more strategically sound product roadmap.

3. A product strategy improves your team’s tactical decisions.

No organization delivers a product to the market following the exact plan drafted in the initial roadmap. Things change along the way, and product managers need to be prepared to adjust their plans and priorities to deal with those changes.

When you and your team have a clear product strategy as a reference point, you can make smarter strategic decisions about adjusting your plans, especially if you lose resources or need to change your estimated timetables.

A Product Strategy Template

Here is a template you can use to follow the three-step process above.

Define your vision.

Add bullets to describe each of the outer circles above—competitors, personas, etc. During this exercise with your team, a picture should emerge of the problem you hope to solve for your market, for example, and the people and businesses it will help.

The exercise should help you develop a vision for your product.

Establish your product goals.

Next, add your goals for the product. For each goal, decide on a quantifiable way to track its success and set a deadline as well.

Create your product initiatives.

Now it’s time to translate your product goals into high-level themes that you can add to your product roadmap. Once they’re on the roadmap, your cross-functional team will review these themes, break them into detailed tasks, and begin working on them.

What are the Key Components of a Product Strategy?

Product management expert Roman Pilcher suggests a strategy should contain the following key elements:

• The market for the product and the specific needs it will address.
• The product’s key differentiators or unique selling proposition.
• The company’s business goals for the product.

Another way to understand this is that a product strategy should include the following three components:

1. Product vision

As we discussed above, product vision describes the long-term mission of your product. These are typically written as concise, aspirational statements to articulate what the company hopes the product will achieve. For this reason, a product vision should remain static.

For example, Google’s early vision statement for its search engine was, “Organize the world’s information and make it universally accessible and useful.”

2. Goals

A product vision should lead to high-level strategic goals. These goals will, in turn, influence what the team prioritizes on its product roadmap. Examples of product goals include:

• Increase free-trial downloads by 50% in the next 6 months
• Improve our average customer rating by one star on major product-review sites
• Generate $3MM in revenue within 12 months

Using SMART goals is the best approach to utilize when setting goals for your product strategy. Like product roadmaps, goals should be specific, measurable, attainable, relevant, and time-bound.

3. Initiatives

Initiatives are the strategic themes you derive from your product goals and then place on your roadmap. They are significant, complex objectives your team must break down into actionable tasks. (The product roadmap is, after all, only the high-level blueprint.)

Examples of product initiatives include:

• Improve customer satisfaction
• Increase lifetime customer value
• Upsell new services
• Reduce churn
• Add customer delight
• Break into new industries or geographical areas
• Sustain product features
• Increase mobile adoption

Where Does Product Strategy Fit in the Development Plan?

The product strategy should bridge your product vision and the tactical steps to fulfill that mission.

First, your team will develop the vision for the product. For example: “We will help businesses unlock valuable information by making their data more accessible and useful.”

(Note: Your team might also choose to draft a separate product mission at this stage. But product vision and mission are both concise, high-level statements conveying your big-picture aspirations for the product. You can create just one if you prefer.)

After you’ve settled on this vision, you can then work on the product strategy. This step will involve answering questions such as:

• Who are our personas for this product?(In the hypothetical above, the answer might include business analysts and database administrators.)

• What problems will our product solve for these personas?(One example: the product will allow users to easily combine data sets from multiple applications without having to convert formats or copy and paste.)

• How will our product differentiate itself and win the market?(We will give personas a visual interface, with charts and graphs, to help them make more sense of their data than they can with other tools.)
  • What are our near- and long-term goals for this product?(Here, you might set a goal to sign up a certain number of users within the first two quarters after launch and to capture a percentage of the market within three years.)

After your team has built out the product strategy, it will be time to translate it into an action plan by prioritizing the major themes on a product roadmap.

You will then use this roadmap to build a detailed plan, including a product backlog, planning for the development team’s sprints, and developing a project timeline.

Learn how to align your product strategy with customer feature requests:

What Are Effective Product Strategy Business Models?

To this point, we’ve focused on the mechanics of developing a product strategy. What about the substance of the strategy? What types of business or revenue models should a company consider when coming up with its product strategy?

Here are a few examples of effective models for product strategies.

1. Product-led growth

We’ve written an in-depth article on how Zoom used the product-led growth (PLG) model to dominate during the pandemic. But here’s the bottom line: With the PLG approach, a business focuses on making the product its marketing and sales representative.

In many cases, such as with companies like Dropbox and Spotify, that means making the product free for a certain level of service and charging only users who want to upgrade to more advanced features. Because they find the basic service valuable, users tell their coworkers and friends, who also sign up for the product.

In other cases, businesses use the network effect to succeed with product-led growth. Companies like Slack and Zoom have benefited from this model. Zoom, for example, refocused its efforts early in the pandemic to make its app more user-friendly for the many new business users who needed it to connect while quarantined at home. The company also created features for new customers—notably schools—that would have unique needs.

2. Product segmentation

One product strategy proven effective by many companies—including Zoom—is to build different versions of a product to meet the unique needs of different personas.

For example, if you build apps for cybersecurity, you might choose to create a consumer version. The key selling feature of this app might be that it runs entirely in the background, protecting the user’s data and devices.

Your team might then build an enterprise version targeted at IT professionals, where your key selling points will be different. In this case, you will make sure the app makes it easy for businesses to comply with data privacy laws. You will also focus on building an administrator dashboard that gives the IT team a real-time view of its digital environment security.

3. The lean product differentiator

In the early days of the web, Yahoo! held the dominant position for an online search. But the company’s homepage was cluttered with links, buttons, and ads.

Then Google came along with a home page with almost no links, not a single ad, and comprised almost entirely white space. The only explicit following action on the Google homepage was to type in a search request. We know who won that competition.

One viable strategy is to release a product that lets users perform only a single task. The key is to ensure that 1) the task solves a real problem that your persona is facing, and 2) your product makes completing this task easy.

This strategy can work whether your product has competitors on the market (as Google did with Yahoo!) or you’re creating a new product category.

Suppose your product is easy to use and solves a real problem for your market. In that case, making the product as lean and focused as possible is a great strategy and a valuable product differentiator.

Related Terms

product strategy framework / product vision / product mission / product roadmap / product-led growth