Sharpening your product/service strategy

In times of change, it’s wise to revisit the strategies of your products and services. Partly to adapt to the changing market conditions but also due to that clarity and differentiation will be crucial in a tougher market. We know that when uncertainty increases customers will most likely have more strained budgets, prioritize fewer initiatives, reduce risk exposure, etc., which should be reflected in our product/service strategy. Naturally, it is more challenging to make major changes if you offer physical products than if you offer services and to some extent digital products. However, you can also use the following approaches to help tweak your marketing- and sales communication.

If you are in a large, maybe even international, organization you might think that the product strategies are the headquarters responsibility, not yours. My experience is that you have to adjust centralized strategies to local market conditions. It is seldom that a one-size-fits-all strategy is applicable worldwide.

Porter Three Generic Strategies

A classic approach can be found in Porter's Three Generic Strategies (https://www.mindtools.com/pages/article/newSTR_82.htm). Here it is emphasized that you must make a strategic choice on what to focus on.

1. Cost leadership.

2. Differentiation.

3. Focused. You choose to focus on a specific segment / market / role etc.

Porter's Three Generic Strategies

Porter points out that you must choose one of the paths above because it is not achievable to go for a combination when its too costly. If you don’t, you will be stuck in the middle.

Later we have seen a modification of Porter's truth (https://www.business-to-you.com/value-disciplines-customer-intimacy/ ) pointing out that the following factors have a major impact:

• Operational excellence

• Product leadership

• Customer intimacy

Companies should have an acceptable level in all three disciplines, but to become a market leader, you must, in a similar way as Porter, focus your investment on one path as it cost too much to become a leader in all three. Both Porter's and this approach have been challenged in recent years as disruptive ideas have created new markets in an extremely short time, reaching a large audience with an attractive pricing.

Blue Ocean Strategy

Blue Ocean Strategy (https://www.blueoceanstrategy.com/what-is-blue-ocean-strategy/ ) believes that one can differentiate in such a way that one diverges so distinctly from the rest of the market that competitors become irrelevant. At the same time, you can maintain a cost level that makes your offering attractive to a broad customer group. In this way you create your own blue ocean to swim in without any other shark to share it with. In your product offering you should aim for:

• Raise selected features over the industry standard

• Lower selected features under the industry standard

• Eliminate certain features that is common in your industry

• Create new features

A good example is GoPro. When they announced their first camera, they had reduced or eliminated a lot of features that other cameras had, but added and enhanced features such as durability, size, mounts, etc. By doing so they created its own market space, that was later named action cameras, with cost-effective products attracting a large audience.

The Blue Ocean Strategy offers a whole toolset but I recommend having an extra look at their Value Curve concept. A straight forward tool you can use to visualize how your offerings value stands compared to the industry standard.

Blue Ocean Value Curves

The horizontal axis on the strategy canvas captures the range of factors that an industry competes on and invests in, while the vertical axis captures the offering value levels that buyers receive across these key competing factors. A value curve or strategic profile is the graphic depiction of a company’s relative performance across its industry’s factors of competition. (https://www.business-to-you.com/blue-ocean-strategy/)

You can dive deep into the above approaches, in online courses and zillions of books but many of us rarely have time for that. However, I think, even at a high level, you can use them to internally start a discussion about how you can position your offerings and direct your value proposition in a strategic direction that suits selected customer segments and reflects the times we operate in.

Thanks for reading and I would appreciate feedback on how you refine your product strategic directions, so we can help each other sharpen our sales tools and boozt our businesses.