Product Strategy Problems
The problem is that many managers see product strategy as the roadmap of changes to a single product. Or they view it as the roadmap for several independent products. It’s the roll-up of Gantt charts, each delivering changes or advancement to a product. This thinking is great If you’re an entrepreneur or you work in a start-up. But the thinking isn’t great if you work in a company with many products.
Few companies produce just one product. In fact, most companies have product lines that serve several customer groups with many products. A single product orientation falls flat when a company has a line of products. The challenge arises because strategies and their road maps are different for product lines.
OK, I know this may seem obvious. But my message is important.
A single-product strategy works to advance a product’s features and quality. And it does this while seeking to manage price and control costs. A product strategy also lays out a new product by detailing features, customer needs, and work-plans. Plus, it may outline each product’s branding and positioning. No doubt, these topics are important.
Product Line Strategy Gains
But a product line strategy goes further. The product line strategy will seek greater gains across multiple products and multiple market segments. This is because product lines have two unique advantages over a single product. They gain from leverage and from cross-market synergy. And these gains can be large.
Going from single-product thinking to product line thinking is a major change. Management teams may not realize their company is stuck in single-product thinking.
Contributors might even revel in the single-product approach. For example, you may hear managers praise the benefits of creating a roadmap. That’s the single-product kind. Having a roadmap, they say, is great progress compared to not having one. Sure, but the progress is limited to single product thinking. It lacks the potential gains from a product line strategy.
If you work with product lines, you likely use some product line thinking. It would be hard not to. The question, though, is whether your work, your decisions, and your information systems drive the most from your line.
Learning Product Line Strategy
Good product line management demands a deep understanding of product line strategy. Plus, it requires a framework to drive the strategy. This is a framework that helps teams to foresee and respond to market and technology changes. And it works to gain cross-organizational alignment to boost the product line.
A product line team’s primary job is to gain the knowledge and skills to carry out a great strategy. Those who expect to learn on the fly, soon discover they’re also late to the game. Unfortunately, late strategy moves tend not to be great. And expecting great results from single-product thinking is misguided.
So what makes product line strategies different? The core of a product line strategy, what I call the Strategy Essence, has three parts. The first is at least one platform-lever. I know the term is wonky, but I use it to distinguish levers internal to product lines, not the external platform that shape whole business models.
Platform-levers add value in two ways. First, they help companies develop and add new offerings in the line much faster than can be done with a single product orientation. The second advantage of a platform-lever is that it delivers greater attribute performance. And it does this at a lower cost compared to a single product orientation.
Platform-levers work when companies focus on them intensely. They need multi-generational planning. And changing them, especially their type, is a notable pivot to a product line strategy. You can read much more on platform-levers here.
Segments and Positioning
The second part of a product line Strategy-Essence is Attribute-Positioning across markets. This is the deliberate match of product attributes to market needs. And it starts with how companies segment their markets.
When you use single-product strategy, you miss the gain from smart market segmentation. That’s because segmentation sets up how well you satisfy customers and your ability to beat competition. And it involves defining customer needs and Jobs-to-be-Done. You can read more on Attribute-Positioning here.
The third part of a stellar Strategy-Essence is alignment with non-product line strategies. This include roles like sales, supply chain, and information systems.
Approaches like intrapreneurship avoid alignment issues. This may be good for the innovation. But the results aren’t always the best for the business. Smart product line strategies work differently. They spot alignment issues and tackle them directly.
Cross-organizational alignment, what I refer to as Chain-link alignment, is rooted in business strategy thinking. A product line strategy is just one link in a full business chain-link. But it’s an important link. Great business performance depends on good product line strategies.
When platform-levers or market segments change, the product line strategy changes. You’ll also see that cross-functional alignment must change. It’s because one function’s strategy can lift or sink the others. And a change to the product line strategy will affect the other functions.
To underscore the point, consider when a company tackles digital transformation. The change affects each function’s strategy. And to benefit the most, you’ll find that product line strategies must also change. The key is to understand how alignment and product line strategy work together. Chain-link alignment is important to a product line’s success. Learn more about Chain-link alignment here.
The real boost to product lines is when the three Strategy-Essence parts work in unison. That’s what you’d like. But it’s not as easy as it sounds. Some part will fall out of sync. It might be a platform-lever that matures and provide little gain. Or it may be attributes that fall behind competitive offerings. Things change. And not always for the best. It’s the product line team’s job to foresee the challenges and the opportunities. And it’s also their job to make sure innovations move forward and work completed.
Learning Product Line Strategy
My call to action is for managers working with product lines to leave single-product thinking behind. Product line plurality offers much greater gains than a single product focus. It takes product management and innovation to a higher impact level. To get there requires new knowledge and new thinking. Don’t expect to keep customers satisfied and beat competition by hanging onto single product thinking in a product line world.
Consider purchasing and reading my book, The Profound Impact of Product Line Strategy. Or consider my in-depth Masterclass. This 1-day class enables deep discussion specific to different product lines and organizations. You may also find our customized Seminar, held on-site at your offices, a perfect fit to your needs and your product lines.
Whitepaper– Good Product Line Strategy Matters.