Tweet this: @PGopalan Understanding the strategy pyramid http://wp.me/pXBON-2ta #prodmktg #prodmgmt
This past weekend, I was at the annual leadership summit of the American Marketing Association. The key note address was about how to be a great leader. The speaker talked about how a sound situational understanding forms the basis for any leadership. That prompted me to write this one – how a sound understanding of the strategic organizational pyramid helps shape products coming out of large organizations and the means to compete.
If you are at a ‘single product startup’ you are lucky your product strategy, business unity strategy and corporate strategy are all the same. For those that work at larger firms, the story is different. You can’t simply apply what works for a one-product company to a similar product coming out a larger company with a much larger portfolio.
For a product manager, this basic understanding is very important for the success of his product. The rule of the thumb is the following – find ways at each organizational level to make the whole better than the sum of the individual parts. What does that mean?
Take a look at the strategy pyramid in the exhibit. If you have a product in a business unit and compete against single-product vendors in the market that deliver a comparable product, you have two options to compete – you can either a) go head on and play a feature war or price war with your competitor or b) you can look at competing on a ‘whole product’ offering. The former strategy is a losing strategy because chances are your product organization (given its size) is likely to produce at a slower pace and at higher cost. The second option is a much more attractive option if you are able to figure out what those ‘whole product’ experiences could be. These could be ideas such as bundling with other portfolio products and offering a discount for the bundle, providing out of the box integrations, single vendor management experience and so on. The strength then, of these products, is not to be sold as stand alone products, but as an entire suite of products and portfolios that work together to produce a result that is much better than getting best of the breed individual products.
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