Sir Alec Issigonis, visionary designer behind the BMC mini, once quipped, “A camel is a horse designed by a committee.” Product managers have to balance competing priorities from around the company to achieve your goals. There are countless ways to approach the design, execution, and marketing of a single product. But trying to do it all at once will only result in a camel for your customers—when you need a horse.

You need a unified product strategy.

A product strategy provides a clear, single plan for your product team to follow as you research, build, and test your product before releasing it to the world. In this post, we’ll talk through how to build a strong product strategy, including types of product strategies, examples, and more. 

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What is a product strategy?

A product strategy is the outline a company creates to identify its vision for its product and how it plans to achieve that vision. The goal of a product strategy is to end up with a product that aligns with your company's values, brand, and desired outcomes. 

A product strategy framework is all about approach.

“The product strategy is how you get to the product vision,” says Michaela Sleeth, senior product manager at Appcues.

“It's a bit more technical. It weighs what your users are looking for and what competitors are offering against your current tool stack and processes.” 

Key benefits of a well-defined product strategy

A product strategy unifies your entire organization around a single plan for your product. Challenges will almost certainly arise during research, development, and testing. Companies that adhere to a customer-centric product strategy ensure that necessary changes made during product development stay aligned with their strategic goals for their product—and continue to wow customers so they come back again and again.

Product strategy is necessary for 3 reasons:

1. A product strategy codifies a single way forward

“If you didn't have a product strategy, you'd have tons of cooks in the kitchen,” says Sleeth. The decision-makers in your company might agree on a concept for your product, but they may all have different ideas on the best way to get it there. A successful product strategy effectively serves as a pact between stakeholders to follow a single high-level approach to achieve your business objectives.

2. It informs the product roadmap 

Product managers obsess over their product roadmaps, and for good reason. A product roadmap serves as the zoomed-in blueprint for your product development and release process. It breaks down each phase of the process into individual tasks and deadlines to keep the many teams working on your product on track. 

Every member of every team, from engineering to marketing, will have to make in-the-moment decisions at some point during development and release that impact your product's future. A successful product strategy answers their questions and helps them map out minute details for your product roadmap, like feature development and testing. That way, it stays in line with the original goals and vision for the product. (We’ll talk more about how they fit into your product strategy in a moment.)

Read more: How to create a product roadmap in 6 steps

3.  And aligns stakeholders and secures buy-in from leadership.

Widespread awareness and adherence to your product strategy across your company are essential to your product's success. A product strategy answers “why this?” and “why now?” for your engineers and designers so they can make the best possible decisions as they work.

Your product strategy also removes uncertainty from the equation with your executive leadership team to show how it fits into your overall company strategy. Whether you need more headcount, budget, or time, you can use the product strategy as a way to get buy-in and show that your team is aligned with the company vision and business goals.

How to create a product strategy framework 

It's a straight line from a product strategy that's haphazardly slapped together to a product that misses the target market. Since your entire product development process will be built from your product strategy, it pays to take the time to carefully piece it together. Here’s how product managers should do it:

1. Establish a well-defined product vision

Product strategy is often confused with product vision. Both focus on creating the best possible product in the long run (and to keep things confusing, both terms are often used in conjunction with each other. 🫠)

Before you create a product strategy, you must have a product vision. Your product vision, like your company vision, is what you want to achieve with your product. It's how you want your product to impact its users and the general market after release, and what you envision it becoming over time.

If you're having a hard time articulating your product vision, just fill in the blanks on this formula and use the resulting sentence as a starting point:

“[Product name] aims to [product description] that [ultimate goal] through [high-level summary of strategy].”

This formula would result in the following vision for Chewy: “Chewy aims to create a customer-focused ecommerce site for pets that fosters brand loyalty through stellar customer service.”

Read more: Product planning: Definition, benefits, & how-to guide

2. Research the market and set business goals

Great ideas often crumble in the face of empirical data, so it's important to use research to identify potential flaws in your hypothetical product. Research for product managers can uncover potential opportunities in prospective markets or with particular features that you may not have otherwise known about.

This stage is referred to as “product discovery,” which is fitting. You're effectively discovering whether there's actually a target audience for your great idea through data-driven insights. Good product discovery focuses research on:

• Your customer base. The best way to find out how your customers behave and what they want from your product is to ask them directly through customer interviews, surveys, and focus groups.
• Your competitors. Sign up for demos, read customer reviews, and visit the blogs and social media accounts of your competitors to discover what customers love about their products and what they want improved. Study how they went to market and what obstacles they've encountered to inform your own strategy.
• Macro-economic trends. You can't predict how the economy's going to look at the time of your release, but you can evaluate multiple scenarios and include those what-ifs in your product strategy.

Research should inform your initial product objectives. For example, your user conversion goals would be higher if you were releasing a brand-new concept during a healthy market with zero competition. Meanwhile, a quality-oriented product facing stiffer competition may want to focus more on user retention metrics as an indicator of overall success.

Read more: The case for product discovery: A 4-step guide to saving time and money

3. Build a product roadmap that gets you there

Your product roadmap is a key component of your product strategy, but they are not the same.

Once research backs up your grand designs for your product, it's time for product teams to create an action plan. Product roadmaps serve as the instruction booklet for your product and set expectations, tasks, and deadlines for every team that has a hand in building or releasing your product. The roadmap keeps everything on track and allows teams to anticipate future bottlenecks or obstacles in development. 

Your detailed product roadmap should always be customer focused, but it's equally important to factor in your existing human resources and technical infrastructure. “Every team is different,” says Sleeth. “What works for one organization won't necessarily work for another organization. Tailor your roadmap to how your team works best.”

Read more: The 15 best product roadmap tools to keep your plans on track

4. Data-driven decision-making throughout the product lifecycle

Release doesn't mean the end for your product strategy. Once your product is out in the world, you'll finally be able to determine the success of your efforts in time for the next patch or release.

Once users show you exactly how they want to use your app, your product team may need to shift priorities. Perhaps users want a new feature you didn't initially plan for. Maybe a feature you thought was important has low adoption. 

Evaluate your existing strategy ahead of releasing more products to track progress toward your business goals, evaluate your product’s features or generate new product ideas.

Don’t be afraid to change up your initial strategy as your company and product management team grows. The product initiatives that launched those first features may not be the same ones that get you to the next stage of growth. (Isn’t that what product management is all about?)

Types of product strategies

Product teams should calibrate their strategy based on the unique value proposition of their product. The type of strategy depends on an evaluation of your product vision, market research, your existing tech tools, and your internal collaborative processes. 

1. Cost strategy

A cost strategy, also known as a pricing strategy, revolves around releasing a product that's similar to those already out on the market but at a lower price. (Think: off-brand products at your local grocery store.) 

SaaS companies only make money on this “same, but cheaper” strategy if they find ways to bring down production costs. This often involves streamlining a more popular product concept down to its essential features for users uninterested in flashy but ultimately unimportant bells and whistles. 

For a cost strategy to work, you must still preserve the core value of the pricier option. If users see that competitors charge substantially more for their product than you charge for yours, they may unfairly determine that your product isn't worth purchasing due to its perceived low quality

2. Quality strategy

The opposite approach involves building a premium product that commands a premium price. Quality-focused products offer impressive features that reliably meet customer needs. They also require an easy-to-maneuver UI and dazzling UX to provide the best possible customer experience.

A quality strategy works best if you've had time to develop a reputation for your product line. (And if you have great marketing and sales teams.) Start-ups or companies without name recognition may want to consider another product strategy initially until they build the necessary reputation for quality.

Sleeth points out that while some high-level plans can be combined to create unique hybrid strategies, this can't be done with cost and quality approaches: “Let's say you want to get something out the door that's cheaper and you want to keep resources and costs low, so you can sell low. That's going to impact the quality of the product.” 

3. Differentiation strategy

Cost is one way to stand out in a market filled with similar products, but you could also focus on what makes your product different from what's available, such as:

• Ease of use. If what's out there currently isn't particularly user friendly, you could build a product that does the same thing, just easier.
• Creating a novel feature. The easiest way to stand out? “We do this—and our competitors can't!” 
• Adding more features. Make a Swiss Army Knife product that doesn't just solve one problem—it solves 10! This saves users from needing to invest in multiple solutions, adding value to your product that your competitors don't have.

Differentiation strategy focuses on creating a product that contains a unique value proposition that makes it more attractive than competitive offerings.

4. Time-based strategy

A time-based strategy involves getting your product off the ground ahead of other comparable products to gain a competitive advantage, such as:

• Market share. Users interested in your tool won't have anything else to choose from, allowing you to lock down the market. 
• Customer loyalty. If you impress your new customers from “go,” you'll stand a chance of retaining a large percentage of your original user base. 
• Early data. You can use customers' behavioral data to see what's working and what's not within your app as soon as they start using it. This will let you proactively iron out friction in your UX and inform new features or products down the line.

A well-received “first of its kind” product enters the public consciousness and sticks there even as other similar products eventually flood the market. People commonly call any box of facial tissues Kleenex regardless of the actual brand because Kleenex came first. It's a massive branding advantage.

5. Focus strategy

Not every product has a massive target demographic. A product may appeal to enterprise businesses in a niche vertical or may only be useful for a unique audience like start-up founders. A focus strategy enables companies to build a product whose features serve audiences who share:

• Geographic proximity. PropTech companies like Homeward currently serve specific cities and regions. It wouldn't make sense for their product and marketing to address locations they don't currently serve.
• A specific persona. You're bound to have better luck with your “SaaS-focused recruiting product” if you build it for SaaS-based recruiters and literally no one else.
• Demographics. Your product may specifically serve a certain age, gender, income level, or education. For instance, if your product is a mental wellness app for senior citizens, you should factor age into the decisions you make about your UI and UX.

Key components of an effective product strategy

The different types of product strategies will each have their own unique aspects, but the most successful product strategies all share several universal features. Your product strategy should contain these key elements:

1. Measure progress and stay aligned to business objectives

You can't evaluate the success of your product strategy without first identifying what that success will look like. Start with your company’s goals and work backwards from there to determine how to measure success.

One of the key features of a strategy is its ability to convert the high-level company hopes into measurable goals. Choose KPIs and establish benchmarks so you know how to track success before you hash out the individual details of how you're going to build your product.

Read more: 12 product management metrics & KPIs for data-driven PMs

2. Consistent but flexible operating model

“Appcues has 4 main engineering teams,” Sleeth says. “As much as we follow the same general processes and same goals, what we need out of iterations day to day is very different per team.”  A product strategy needs to establish a foundation for your product development efforts, but it shouldn't be so rigid that it impedes day-to-day flexibility. 

For example, your engineering team uses its own unique tools and has its own particular internal flow. Your product strategy should accommodate these existing resources and methods while leaving room for individual teams to innovate, collaborate, and breathe. An unnecessarily restrictive strategy can unintentionally lead to inefficiencies, frustrations, and bottlenecks at various stages of development and release.

3. Product-market fit with a customer focus

If you want to build a profitable, impactful product, you need to focus on building a product for the people who will use it every day.

The first step to building a customer-focused strategy is identifying exactly who those customers are. Sometimes the answer is obvious: “I want to build an ecommerce site for musicians.” But even obvious cases will require extensive follow-up research to identify the viability of your target users, especially in a niche market. 

In this example, you’ll want to ask yourself:

• Do musicians even have a need for your service? What are their pain points?
• Should you cater to musicians of a certain genre? Of a certain age? 
• What competitors exist in this space, if any? Do they have successful products already?
• What is your unique selling proposition?
• What does the broader market look like? What market trends do you see?

Once you've figured out your target audience, their needs should serve as the foundation of your development and subsequent release processes. As you plan on delivering a minimum viable product (MVP), your strategy will need to prioritize your product's stickiest and most valuable features. These features will entice users to try out your product and engage them enough to get them to stay even as you work on building out the rest of your app's components.

What are effective product strategy business models?

Your product initiatives aren’t just about executing around specific features or releases for your product management team. Done right, a great product strategy can produce real growth for your entire business. Here’s how:

1. Product-led growth

The product-led growth flywheel revolves around optimizing the entire user experience. This is not just about creating a high-quality product (though that is a prerequisite) but about building an entire customer journey that creates loyal brand advocates who are enthusiastic about your products, driving new user acquisition. 

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Investing in the complete flywheel means bringing together every team—not just customer-facing teams—to relentlessly focus on improving the customer experience. Your product strategy sits at the center of this model, positioning everything from signing contracts to customer onboarding as a “feature.” The more you can remove friction from the user journey, the faster the flywheel will turn.

2. Product segmentation

The opposite of a strategy is saying your product is “for everyone.” Each user comes to your product looking to complete a specific task or set of tasks—their jobs-to-be-done—so why treat them the same?

Once you have a solid product strategy in place, you can tailor the user experience to different segments of your users based on their behavior. Do some users jump immediately to one specific page? Do others spend hours per day with your tool? The more data you gather, the better you can make their experience, boosting your retention rates.

Make sure your product strategy template includes how you plan to segment their experience, whether it’s by usage, paid tier, or stated preferences. This kind of personalization deepens the relationship with your customers and makes their lives that much easier.

3. Lean product differentiation

No product manager looks at a product and thinks their work is done. (That’s part of the fun!) But you don’t want to add features just because they’re interesting, or because your competitors are doing something similar. Anything new that you add should directly address customer needs, using rapid experimentation to get at the combination of bells and whistles that resonate with your users the most.

Your product strategy serves as your guidebook for new feature releases in your development cycle so you stay aligned with your top-line objectives. 

‍Real-life product strategy examples

Product strategies aren't just hypothetical constructs. The most successful companies are built on the foundations of a good product strategy, including some of the biggest names in the tech space:

HubSpot: The all-in-one strategic framework

You may use HubSpot as your business' CMS. Or your sales team may use it to track leads. Or you may use it to post your company's social media content. Or you may use it to track customer service issues. Or you might …

You get the point: HubSpot does a bit of everything. It leans hard into differentiation strategy by asking a deceptively simple question: What if you had one tool that covered all of your sales and marketing needs? The company launched its CMS in 2006, but it has since expanded its suite of tools to include sales, marketing campaigns, and service hubs. 

This “everything” strategy serves HubSpot well. The more features and tools in HubSpot's arsenal that customers use, the less likely they are to churn because they'd have to buy multiple products to get the same services HubSpot offers in one platform. The company has used this strategy to eclipse 200,000 customers in 134 countries in 2024 and make more than $1 billion in annual recurring revenue.

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This “everything” strategy serves HubSpot well. The more features and tools in HubSpot’s arsenal that customers use, the less likely they are to churn because they’d have to buy multiple products to get the same services HubSpot offers in one platform. The company has used this strategy to eclipse 100,000 customers in 2021 and make more than $1 billion in annual recurring revenue.

Slack: The “doing one thing really, really well” quality strategy

Slack found success as a business messaging app that positioned itself as a unique solution to a common problem. People were already flooded with emails every day, many of which simply contained questions that only required a quick answer. Meanwhile, existing messaging apps weren’t geared for commercial usage and weren’t particularly robust. 

Slack had already netted 8 million daily users in 2018, but the pandemic sent its popularity soaring. Some 54 million used the app daily in 2023 alone. Slack is still largely viewed as the most user-friendly commercial messaging app on the market. Its hundreds of integrations with popular apps and unlimited messaging plans speak well to companies who need more out of their product than just “type and send” functionality.

This focus on its core offering has made it especially popular amongst enterprise-sized businesses due to its emphasis on organization, scalability, and data security. The company’s decision to focus on building a product focused on one key value proposition paid off, as Salesforce acquired Slack for $27.7 billion in 2021.

Tesla: Creative thinking to launch a household name

Electric cars have been on the market since Toyota introduced the hybrid-model Prius in 1997, but it wasn’t until Tesla launched its roadster in 2008 that electric cars got cool. 

While most automotive brands cater to a wide variety of shoppers, Tesla focused initially on high-end luxury, a previously untapped market in electric vehicles. They also released only one car at a time, making each release a global event. In 2024, they still only have six models (as opposed to a more affordable brand like Honda, which has 17 different models, including electric.) 

Streamlining their go-to-market strategy has paid huge dividends for the company, which sold 1.75 million cars in 2023, a 400% increase since 2019 alone. While other automotive companies have released their own electric vehicles, Tesla holds about 50% market share, cementing their dominance.

Zoom: A low-cost way to build a huge intended audience

Few companies graduate from product to dictionary term, but Zoom managed to do it in 2020 after becoming the de facto video conferencing service for just about everyone during the COVID-19 pandemic lockdowns. What makes their 68% market share possible? A freemium cost strategy model lets users “try before you buy.”

Like Slack, everyone knows what Zoom is. They know how to use it, and what its value is. That’s probably why they handle 300 million daily users and over 400,000 paying customers. While other conferencing tools are nipping at Zoom’s heels—their valuation dropped to $20 billion in 2024, from a high of $159 billion in 2020. 

Turn insights into actions with Appcues

Your user data will prove invaluable in guiding continued development as your product matures. A proper behavioral analytics tool will show you the friction points in your UX—but you’ll also need a way to turn those insights into actions.

Appcues covers both bases, serving as a powerful analytics tool and a premier UX platform. Create user-friendly release announcements to highlight your newest data-guided features. Identify user frustration in your onboarding processes and then build a no-code product tour all from the same app. Best of all: Appcues’ various UI/UX patterns like tooltips, modal windows, and slideouts don’t require code to implement, allowing you to focus your energy on other challenges.

The long-term success of your product requires a solid product strategy, and every good product strategy needs a product manager to hold it all together. As a product manager, you juggle a lot of balls—but tools like Appcues will help you from dropping them.

FAQs

What is product strategy?

A product strategy is a single, unified direction for your product team as they concept, build, and iterate on your products. This is different from a product roadmap, which focuses on the details of  how a product gets built and when.

What are the 4 major elements of a product strategy?

The four major elements of a product strategy are vision, market research, roadmap, and measurement. As you build a product strategy, you need to think through your overall strategic priorities and how your product will achieve them (vision), understand product-market fit (market research), define how the product will be built or improved (roadmap), and track your progress against your business goals (measurement.) Jump to the section on elements of product strategy for more.

What are the types of product strategies?

The types of product strategies are cost, quality, differentiation, time, and focus. You may choose different product strategies for separate product lines, or combine elements of them to find your way forward. Jump to the section on types of product strategies for more.

What are some examples of companies with innovative product strategies?

B2B software companies like HubSpot, Slack, and Zoom are examples of successful product-led growth with different models. Outside of software, Tesla is a great example of an innovative product strategy. Other examples include Apple, Netflix, Coca-Cola, and GoPro.

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