“What is a product strategy and how does it link to a business strategy?”
Finally – an easy one! Although, it is amazing how many times I get asked this exact question; so maybe the answer isn’t quite as easy as I think!
At their core, a product strategy and a business strategy contain the same basic elements. That is, there is some situation analysis, some idea of the goals you want to achieve, some plan to achieve those goals, and some way to execute on that plan. So, I guess that’s the easy part of the answer.
The not so easy part of the answer is how they’re different. Sure, a business strategy focuses on a business, and a product strategy focuses on a product, but there’s just a little bit more to it than that.
It’s really a matter of scope. A business strategy needs to be intentionally broad, mostly because, especially for larger companies, the business strategy needs to encompass the strategies of many different products and portfolios. So, for a business strategy, you might get big, broad statements like: “innovate in emerging markets” or “bundle our product and service offerings.” Although these types of initiatives do not tell you exactly how you will go to market for each individual product, they do provide enough guidance to create individual product strategies that align with the overall business plan.
And that is exactly the point – product strategies are meant to complete the overall business strategy by providing more detailed plans on how exactly a business will achieve its overall objectives. The biggest differentiator here is the amount of detail that the product-level strategies will need to go into; particularly with respect to the strategic initiatives. A good checkpoint is to be sure that your product strategies provide some level of detail around the go-to-market part of your plan – that is, how will you evolve your product over time, how will you price it, how will you promote it, how will you place it, and who exactly do you plan to sell it to.
In the end, the sum of your product strategies need to add up to your overall business strategy. So, your product objectives all need to add up to your overall business objectives, and all of your strategic initiatives ultimately need to align. If you can accomplish this effectively, your business strategy and product strategies will come together to form your overall business plan. That’s not always an easy task for large companies with multiple product managers. But, when it all comes together and works, it’s nothing short of magic!
Listen to the podcast episode
Dear Strategy: Episode 012