Competitive product strategy

As a product specialist and being accountable for his product portfolio, a product manager is (or should be!) involved in the strategic planning of his company. It requires some disassociation from day-to-day product activities and an understanding of the bigger picture. One of the aspects in selecting strategic goals is the competitive strategy.

A competitive strategy defines in what discipline the company performs best (compared to competition) and creates a kind of boundary in which new initiatives should fit. There are three value disciplines that define this context: product leadership, operational excellence, and customer intimacy.

A company that focuses on product leadership strives to put the best product on the market: the best performing, the most powerful, the biggest, the smallest, the shiniest, … whatever beats the competition. In general, this means an internal focus on research and development.

A company that excels at operational excellence puts a lot of effort in mass production in an attempt to produce goods as efficiently as possible and at the lowest cost. They will beat competition on price, not features. Major investments are allocated to production optimization programs and automation to streamline the production chain.

A company that is superior in customer intimacy puts its focus on individual customer satisfaction by offering product customization and excellent services. It provides unique solutions rather than mass-produced, off-the-shelf products.

It is crucial to understand that it is basically impossible to excel in each of these disciplines. The advised strategy is to focus on one of these disciplines, while performing at an acceptable level in the others for the market you are in. E.g., it is tempting to try to grow your market by offering a low-cost baseline of your product next to the high-performance star product, but chances are high that your competitor will beat you at it.

More information on strategic management for product managers can be found in my book “Practical Product Management”. Go to https://www.neobasics.be/product/shop-practical-product-management for a description of the book contents, a preview and how to order it.