Home > Blog > 8 Tips to a Great Product Development Strategy (with Examples)
8 Tips to a Great Product Development Strategy (with Examples)
How do the tech giants of the world develop their products? For example, Google, Amazon, and Apple all have very distinct product development strategies. Their product development strategies are their unique way of coming up with new ideas and transforming them into engaging, helpful, and in many cases, profitable products and services. Those product development strategies may just be among the most valuable assets those companies have.
Product development strategies are not static. They adjust as markets and consumer demands shift and change. So before we arm you with some tips to create your product development strategy, let’s define what a product development strategy is and why it is essential.
What is a product development strategy?
A product development strategy is a series of steps for bringing a vision to life. To get to a finished product, you must go through a series of steps, and defining those steps from the onset will make the entire process more manageable.
You will most likely start with an idea. This idea can bring an existing product to a new market, a new product to a current market, or a new product to a new market. The concept can rely on solving a problem or meeting a need. Regardless, the better you define your goals, the easier it will be to make a plan.
Why is a product strategy development strategy important?
When a team works together, it is vital to have a clear path and goals. A product development strategy helps ensure everyone is on the same page and working towards a common goal.
A product development strategy defines a clear set of goals. By having clear goals, you can set metrics to identify whether your product meets your goals.
An essential part of the process is market research. Understanding your target audience is paramount to the success of a new product.
Envisioning the development roadmap will help you find problems before they arise, saving money and time on misleading paths and dead ends.
9 Types of product development strategies
An excellent way to familiarize yourself with different product development strategies is to learn the nine types of strategies defined by Urban and Hauser in their book Design & Marketing of New Products. Those strategies fall into two categories, proactive and reactive.
1. Invest in market research
Market research is a way to check your new ideas against the current marketplace and a place to find new opportunities.
2. Invest in research and development
New and innovative technologies can be discovered and developed without a specific product in mind. Once such technology exists, you can develop it into a product.
3. Investment in entrepreneurship
People already in your company may have brilliant ideas that they simply need time to develop. New products may come from within your company.
4. Make alliances
Collaboration with industries outside your market can produce interesting new ideas that can be mutually beneficial.
5. Acquire other companies
Identifying companies with products in your market and acquiring them can boost your market share.
6. Respond to customer’s requests
Sometimes (not always!), the customer knows best. Listen to what your customers say they need; they’re often giving you free ideas.
7. Defend against the competition
Not an ideal strategy, but one your company is bound to use at one point or another. Adjusting prices, brand image, and marketing can be defensive strategies against the competition.
Depending on your position in the market, copying a competitor might be a viable strategy. At which point you will want to make a similar product, either cheaper or higher quality, to differentiate your product.
9. Second, but best
Sometimes strict imitation is not a viable strategy, usually because the competition has too big a market share, in which case innovating on the same idea and making a “better” version could be advantageous.
How to create a great product development strategy: 8 expert tips
1. Be lean without compromising on quality
Lean product development can quickly devolve into rapid releases of low-quality products if you emphasize the speed too much. It is crucial to focus on the minimum viable product (MVP) when approaching lean product development. MVP is the minimum set of features that the customer needs. Avoid feature bloat to keep the development lean, but don’t sacrifice the quality of those core features.
2. Make users / customers part of the process at all times
Customer satisfaction should be the topmost priority (unless you have a monopoly on a given market). Finding out if customers are satisfied simply means listening to them. You can get feedback from customers at various stages of your product development, which will result in drastically different strategies.
Customer as the first step
Amazon sets out to satisfy the customer before they even have a product. In this strategy, you start with writing a press release. You then work backward, designing features until you get to the core design. By writing the press release first, you’re ensuring that the customer is always on your mind. This product development strategy is focused on what the customer will hear when the product is ready.
Getting customer feedback at every stage of the development is a core aspect of the Agile philosophy. This strategy results in far less rigid product development, making fundamental changes as often as once a week. Agile works best when developing an existing product, as it requires continuous feedback from an existing user base. Using the right metrics, such as user engagement, you could get continuous feedback without surveying users.
If your product development isn’t Agile, you might still want to have users exposed to your product in various stages in its development. For periodic feedback, you will need to survey users about their experience. This feedback can be invaluable in determining if you’re on the right track as long as you listen to it.
3. Bravely innovate away from your core product
Your company’s core product is undeniably the reason why customers keep coming back. But that product already exists, and you’re making it. When developing a new product, you want to provide something the customer needs and can’t get.
Ideally, this would complement your core product but not be strictly an improvement on it. Like when FedEx got the upper hand over UPS by innovating in package tracking technology.
A popular process for innovation is Design thinking, which is a process for identifying alternative strategies that may not be initially apparent. At the core of Design Thinking is breaking down our assumptions and questioning everything.
One model for design thinking is the five-phase model proposed by Hasso-Pattner. These five phases are not necessarily sequential and may be executed in any order and even in parallel.
- Empathize with your users
- Define your users’ needs, their problems, and your insights about them.
- Ideate by challenging your assumptions.
- Prototype a product. Always aim for an MVP.
- Test the product to see if it solves your users’ problems.
The challenging of assumptions is a beautiful process for coming up with new ideas. You start by naming all the assumptions you have about a specific product and then challenge them. Rob Daviau said: “What happens in one playthrough of a board game doesn’t affect subsequent playthroughs.” Challenging that assumption is how legacy board games, the hottest innovation in board gaming in the last decade, were invented..
Digital products are prime candidates for experimentation, especially when combined with Scrum. It enables rapid iteration over product development and its adaptation to results. When experimenting with the product, you must be brave. You can use A/B testing to see how those changes affect user engagement or bounce rates.
You can also apply slower experimentation to your product. Facebook often makes changes and gradually exposes more and more users to those changes while keeping an eye on user statistics. They can always stop a change and revert it if it proves to be detrimental.
5. Find new uses for existing products in new markets
You can often modify an existing product slightly to fit a new need. One way to find out if your product can include a new market is to loosely define its set of features and ask people unfamiliar with your product what they would do with it.
You might find that your product solves a problem for a different niche market than your initial target. In 1957 the first bubble wrap was invented and was initially marketed as wallpaper. It wasn’t until 1960 that bubble wrap was repurposed for packaging protection, and later on, stress relief.
6. Localize & personalize
Some products hit a big international market but completely miss other markets. You can gain a lot of traction by creating sub-products that target specific audiences or regions. Design your product from the ground up with a different target market in mind, and you could have another hit product.
League of Legends is now huge in China, but Riot Games had to translate the game into Chinese to open up that market and make sure particular iconography was different. China is notorious for censorship. To enter the Chinese market, you need to adhere to their rules.
7. Support pet projects and encourage innovation
There is nothing that gets a product out the door faster than passion. If your employees have passions for a specific pet project, design, product, or idea, nurture them. This method is called the 20% project, which Google popularized. Supporting pet projects lets personal innovation shine through and keeps employee satisfaction high.
8. Design and maintain a realistic product development roadmap
If you have a well-defined product starting development, setting out a roadmap can be hugely beneficial. Use a goal-oriented methodology such as OKRs or SMART goals. Your development team will always have the roadmap to fall back on when things get challenging or blurry. You must revisit the roadmap and adjust it when necessary. No initial roadmap is perfect, and it must be maintained to stay relevant.
These tips will help you foster new ideas into market-leading products. You can use tools such as craft.io to gather information and lay out a roadmap for your product development strategies. In one user-friendly, highly integrated solution, you can connect your customers to your development processes.