27 Mar To Accelerate Innovation, Focus on Three Elements of Product Strategy
By Mark Thever
Any number of companies can point to a good product strategy – one that allows them to bring products to market at the right times, stay relevant, and compete in a particular product space. Far fewer can highlight an innovative product strategy – one that enables market leadership by setting a course to outpace competition, command consumer mindshare, and capture or even disrupt a market. Given the advantages, who wouldn’t want to accelerate innovation? Attempts to do so can easily go awry, however, when innovation is attempted without the support of a solid product strategy foundation. By focusing on and fine-tuning the three core elements of product strategy, companies can avoid missteps and become better primed to make the game-changing move from good to innovative.
Innovative Product Strategy: The Apple Inspiration
Product strategy provides a vision for where product development teams should be headed, what objectives each product should accomplish, and how products fit into a company’s overarching objectives. The end result of an innovative product strategy is an innovative product that brings new and greater value to consumers and a premium for unparalleled product performance to the innovator.
A classic example of an innovative product strategy leading to an innovative product is Apple’s introduction of the iPhone. Apple’s strategy was not simply to create a competitive phone that possessed internet browsing capabilities, a touch screen, and a built-in camera, among other fancy features. The company’s more ambitious goal was to deliver an enhanced, seamless user experience, eliminating the pain points of traditional cellphone users while simultaneously providing improvements on more standard features such as web browsing and picture-taking. The heightened experiential value delivered by the iPhone enabled it to gain consumer mindshare rapidly and, in turn, caused the creation of the smartphone market as we know it today.
The Three Core Elements of Innovative Product Strategy
Only a handful of companies may ever reach Apple’s level of success, of course, but almost any company can build a more innovative product strategy. The first step is to focus on and fine-tune three foundational elements:
- Alignment with the overarching corporate strategy
- Analysis of current market trends
- Leveraging of product and technology platforms
Alignment with Corporate Strategy
The starting point of an innovative product strategy is its alignment with overarching corporate strategy. Ideally, each product in a company’s portfolio plays a dedicated role in the achievement of the business unit’s objectives which, in turn, play a specific role in achieving overall corporate goals. The enterprise’s overall value proposition typically includes a collection of strategic themes belonging to each business unit, with a given business unit’s strategic themes comprised of the strategies of the specific products within that unit.
A business unit that performs well on its own but does not contribute to corporate synergies is only achieving a portion of its intended purpose. The strategy for each specific product line must create synergy and/or competitive advantage for the business unit (and company) as a whole. It is the responsibility of the executive team to create the broader corporate strategy and communicate it to product teams. If corporate strategy is not clearly communicated, product teams will have a difficult time knowing which initiatives to pursue and which not to pursue.
Ultimately, proper alignment with corporate objectives allows product teams to match day-to-day tactical activities with broader corporate direction. This results in not only better-performing and more innovative products but also higher morale and team motivation.
Recognition of Market Trends
The value component of a product strategy should explain how the product provides substantial benefit to consumers and effectively solves their needs. Monitoring market trends allows a company to identify opportunities for the delivery of this value. By evaluating competitors, segments, and specific consumers, a product group can generate key, data-driven insights which form the basis for a strong product strategy. Product groups use market trends to understand how their product or service meets consumer needs, how competition addresses the same needs, and how their product or service can be differentiated from others. Market trends can be identified by conducting in-house analyses, purchasing market reports, talking to consumers, or tracking product and category performance over time.
Understanding market trends allows a company not only to see the current state of a particular market but also where the market is headed. This forward-looking approach to market analysis can provide a glimpse of the future wants and needs of consumers, thus facilitating the creation of innovative product strategy that is proactive rather than merely reactive.
Leverage of Platform Resources
Generally speaking, a platform is the collection of leverageable assets within a company that are used to create categories of products. A platform in the product strategy context refers to either a product platform or a technology platform. A product platform might be comprised of technical components or parts that are used to create various products or derivatives. A technology platform is the core technology that enables certain types of products. For example, in the semiconductor industry, the advent of 3D NAND enabled higher densities and greater speeds than the traditional NAND flash memory in older generations of products. In this example, 3D NAND represents an innovation in the technology platform, enabling a whole new generation of higher-performing products that sit atop that platform.
A good product strategy utilizes available platforms and leverages company resources to create product offerings that meet market needs. The opportunity to create an innovative product strategy arises when advances are made in the technology platform. In the example above, when 3D NAND became available, a new generation of products was enabled that uses 3D rather than traditional NAND. This created the opportunity for 3D NAND manufacturers to come to market with innovative product strategies and create competitive advantage by identifying the correct applications and target consumers for these advanced products.
A Focus on the Basics Brings an Innovative Product Strategy Within Reach
An effective and innovative product strategy can be created by analyzing and leveraging corporate strategy, current market trends, and advancements in product or technology platforms. You might not wind up innovating as dramatically as Apple did, but investment in both the creation and successful execution of an innovative product strategy will position you to stay ahead of competition, win market share, drive revenue growth, and even pioneer new markets.
About the Author
Mark Thever has more than 10 years of experience in business optimization, commercial management, and research in the semiconductor and life science industries. Through consulting and internal management roles, his accomplishments include significant time-to-market improvements in product development cycles, the creation of streamlined requirements management frameworks, and the implementation of enhanced business processes for Fortune 500 clients. Mr. Thever earned his BS and MS degrees from UC San Diego, his MBA from The Rady School of Management at UC San Diego, and his credential in leadership from Harvard Business School.