How to set product strategy
Breakthrough products seem to appear from thin air. These innovative or disruptive solutions take people by surprise. But behind every seemingly effortless launch is a solid strategy owned by a product team working hard to bring ideas to life. Product strategy includes vision, goals, and initiatives — this foundation underpins successful products and helps you create value for customers and the business.
Jump ahead to explore the following:
What is product strategy?
Product strategy is the process of defining what you want to achieve and how you plan to get there. Product strategy defines the "why" behind the product and must come before the "what," "when," and "how." A goal-first approach is a product manager's best path towards innovation. Strategic planning takes place before you dive into the detailed work of building your roadmap and developing new features.
Set product strategy in Aha! Roadmaps. Sign up for a free 30-day trial.
To create a strong product strategy, you must deeply understand the market context you operate in. This means empathizing with the challenges your customers face, becoming familiar with other solutions in market, and demonstrating why yours is superior.
Product strategy needs to connect to every piece of work the team completes. It guides both the large themes of work and the smaller details that help you accomplish your goals. Strategy aligns the organization around a shared vision and keeps everyone focused on the work that matters most.
Elements of product strategy
From capturing the big picture to determining KPIs for success, components of product strategy include:
Foundation: What you want to achieve
Market: Your customers and the market landscape
Imperatives: The work you will accomplish
What you want to achieve
Your strategic foundation underpins everything that you do. Executive leadership and product leaders will collaborate to develop a product vision and determine the problems your product will aim to solve for a specific customer segment. The result of this work is often business models and positioning templates — visualizations that make it simple to communicate the strategic vision across the company. When it comes time to build a product roadmap, you will reference these models to ensure the work you are planning aligns with the larger strategic vision.
Product vision represents the core essence of your product and what makes it unique. It should be something that everyone in the company deeply understands — the "why" behind the product you are all responsible for.
Who exactly are your customers? What are the problems you are helping them solve? What opportunities and threats do you face? Grappling with these questions allows you to understand the true value of your product and to craft a vision statement that is both accurate and aspirational.
Business models can be used to further understand the customer problems you will solve, the solutions you will build, and the growth opportunities that exist within your market. Models are useful when you launch a new product or want to evolve your strategy as the market changes.
There are many types of business models — including lean canvas, Porter's 5 forces, and the 10Ps marketing matrix, among others. The example below shows a business model developed by Aha! that focuses on why your product is worth buying. The model includes key product messaging, go-to-market details, and investments required.
Positioning is a strategic exercise that is usually done before a product launch. It helps define where your product fits in the marketplace and the unique benefits you provide. Strong positioning supports your marketing strategy, brand storytelling, and all content developed for customers.
Use a product positioning template to capture your mission, tagline, customer, market, and more — all the details you need to position your product for success.
Your customers and the market landscape
You need to deeply understand your customers and what they need in order to build a product they will love. Developing personas and researching competitors are some of the best ways to learn the market landscape.
Personas are fictional characters that bring your customers to life. Creating user personas is one way to develop empathy for your customers — you document their likes and dislikes, professional aspirations, challenges, and more. You then link these personas to different items of work to keep your customers front and center as you build features to solve their problems.
Competitive analysis involves capturing information related to alternate solutions. The goal is to understand where these offerings excel and fall short compared to other solutions in the marketplace. Doing this type of research provides insights into where you fit within the broader market and what opportunities might prove most valuable for your customers and the business.
Competitive research should be an ongoing process — keeping up with the competitive landscape allows you to discover new problems that your product is uniquely positioned to solve. Storing this information in a shared location makes it easy for the team to stay current on how your product stacks up.
The work you will accomplish
Based on the foundational work you have done so far, you can now tackle what many consider the most challenging — and most rewarding — element of strategy. This is the time to lay out the goals and key initiatives that will help you realize your vision.
Goals are measurable, time-bound objectives that come with clearly defined success metrics. They are benchmarks that you want to achieve in the next quarter, year, or 18 months. For example, if you aim to increase revenue and expand into new territories, one goal might be to "increase revenue by 30 percent in the third quarter." The second might be to "expand into five new countries in the first half of the year."
A useful exercise is to plot goals on a chart based on the investment needed (from your team) and the impact (to your customers). As you can see in the image below, this gives you a holistic picture of how your goals line up against one another.
Initiatives are the high-level efforts or big themes of work that need to be implemented to achieve your goals. These strategic investments link your goals to everything planned on your product roadmap.
The table below shows an example goal with sample initiatives and features that tie back to that goal.
Increase revenue by 30% in Q3
Initiatives tend to involve cross-functional work. Visualizing the timing and progress of initiatives (see the example strategy roadmap created in Aha! below) will help keep teams aligned and on the same page
Strategic considerations for product teams
As you work through the steps of developing your product strategy, you will need to consider what really sets the product apart and how that differentiation contributes to your overall strategy. For example, some teams focus on creating cost value while other teams zero in on features that differentiate their product from competitors. Understanding your particular strategic positioning can help you prioritize certain elements of product strategy (such as competitive research or persona creation) so you can meet your team's needs.
Here are some common strategic positions and examples of how you might see them reflected in product strategy:
Type of strategy
Positioning your product as the most affordable among competitors to build your customer base.
Highlighting the features and functionality that set your product apart in the competitive landscape.
Developing products based on what you learn after conducting extensive customer research.
This term is used to mean different things. Sometimes, it refers to building a digital platform that easily integrates with other products so that businesses can create enhanced value together. Other times, the term simply refers to shifting from providing one product to offering several related products that share common core elements.
Delivering the highest quality product in terms of design, functionality, data, customer service, and reliability.
Prioritizing production efficiency so you can shorten the time from concept to delivery. This helps you increase competitiveness within the market landscape.
Vision, business models, positioning, personas, competitors, goals, and initiatives. All these elements are essential to your product strategy. Once your strategy is in place, you can dive into the next stages of the product development process — ideating, planning, and building the features and functionality that will bring your vision to life.
Additional resources and templates
Visit the resources below to set strategy, make better planning decisions, and easily share updates across your team.
Product strategy templates
Business plan templates: Use these templates to help define your marketing strategy, better understand your buyers, and analyze the market you operate in.
Competitor analysis templates: These templates make it easy to organize and communicate your competitive research. Your findings can then inform your strategic plans and help you determine what will make your product a success.
SWOT analysis templates: Compare strengths and weaknesses against opportunities and threats for your business or product portfolio.
User story templates: Get right to the heart of why a new feature matters to your customers.
Product planning templates
Product roadmap templates: Paint a complete picture of your product plans with a strategy roadmap, release roadmap, features roadmap, and more.
Roadmap presentation templates: Choose the right elements to include in your roadmap presentation — whether you are presenting to executives, cross-functional teams, or customers.
Gantt chart templates: Build a detailed Gantt chart when planning any type of time-driven or collaborative effort.
From ideation to launch, better product development happens with Aha! — try it free for 30 days.
- What is a product?
- What is product development?
- What is product management?
- What is portfolio product management?
- What is product operations?
- What is the product lifecycle?
- What is a product management maturity model?
- What is product development software?
- Why product teams need virtual whiteboarding software
- How to build a business model
- What is customer experience?
- What is the Complete Product Experience (CPE)?
- What is product-led growth?
- What are the types of business transformation?
- What is enterprise transformation?
- What is digital transformation?
- What is the role of product management in enterprise transformation?
- What is a Minimum Viable Product (MVP)?
- What is a Minimum Lovable Product (MLP)?
- What is product vision?
- How to set product strategy
- What is product-market fit?
- How to position your product
- How to price your product
- What are product goals and initiatives?
- How to set product goals
- How to set product initiatives
- What is product value?
- What is value-based product development?
- Common product development methodologies
- Common agile development methodologies
- What is agile product management?
- What is agile software development?
- What is waterfall product management?
- What is agile transformation?
- Agile vs. lean
- Agile vs. waterfall
- What is an agile roadmap?
- What is an agile retrospective?
- Best practices of agile development teams
- What is a burndown chart?
- What is issue tracking?
- Introduction to agile metrics
- Agile glossary
- What is scrum?
- What are scrum roles?
- What is a scrum master?
- What is the role of a product manager in scrum?
- What is a sprint?
- What is a sprint planning meeting?
- What is a daily standup?
- What is a sprint review?
- Product release vs. sprint in scrum
- Themes, epics, stories, and tasks in scrum
- How to implement scrum
- How to choose a scrum certification