Product Strategy: What does it mean? Need to understand these concepts to develop the strategy

Product Strategy: What does it mean? Need to understand these concepts to develop the strategy   

Strategy, business model, strategy planning...buzz words are commonly used terms by the product managers. However, a few selected product managers that too with a strategic planning experience actually understand the entire strategic planning/development process in detail. Sharing the basic concepts along with the process product managers need to follow to develop product strategy. 

What is Strategy?

We don’t need to reinvent the wheel on this. Let’s look at two definitions:

• Harvard professor Michael Porter defines strategy as "a broad formula for how a business is going to compete."   It's the creation of a unique and valuable position, involving a different set of activities.
• Bruce Henderson, founder of The Boston Consulting Group, defined it as, "a deliberate search for a plan of action that will develop a business's competitive advantage and compound it"..."competitive advantage is founded in differences."

Strategy is focused on what is needed to create sustainable competitive advantage & deliver customer value.

There is a wide spectrum of paradigms that have emerged over the years to help companies develop strategies. Here is a snippet of how the strategic world looks like from strategy-business.com in their issue 61 (Winter 2010).

What is a business model?

Business model describes how the organization will implement the "Strategy". Business model is focused on the how the organization will create and deliver substantive value to customers.   Product Managers often confuse strategy with the business model.

What is a Strategic Planning?

Strategic planning is the process of conducting research, defining strategies, identifying and developing the business models to achieve the core vision company has outlined.  Simply, put this is the systematic process company follows to answer three basic questions:

• What's the current situation?
• External - Market, Industry, Competitive, Environment …
• Internal - Financial, Current SWOT

• Where do we want to go?
• Select the key strategic focus areas
• Identify strategic options/ alternatives
• Identify the strategy

• How can we go there?
• Execution plan

Product Strategy

So what does it mean for product managers?  This diagram illustrates how the PMs should go about developing the strategy which then leads to product roadmaps.