In a world where trends shift faster than ever, staying ahead requires more than just innovation — it demands a Product Development Strategies: Benefits, Types, and Steps to Create
In a world where trends shift faster than ever, staying ahead requires more than just innovation — it demands well-planned app development.
Read our article if you are interested in the strategies that can help businesses predict market needs, benefit from trends, and create truly remarkable products.
First, let’s discover how a systematic approach can be your key to staying ahead.
Why You Need a Product Development Strategy
Statista reported that companies with a clear plan of action experience an average annual revenue growth of 15% higher than those without one.
Here are the main benefits of well-thought-out tactics, along with some additional statistics:
- Market Alignment ensures that your product addresses actual market needs rather than just being shot in the dark. According to a report by Harvard Business Review, companies with a systematic development approach are 60% more likely to achieve higher success among consumers.
- Resource Management proves useful for resource allocation to avoid wasted time and money. McKinsey & Company found that firms with defined course of action saw a 30% reduction in time-to-market and a 20% improvement in development efficiency.
- Risk Mitigation helps to identify potential threats early and create contingency plans. Product Development and Management Association (PDMA) indicates that companies with robust tactics have a 40% lower risk of product failure.
- Customer Satisfaction is vital for creating a truly significant app. Gartner highlights that companies with a structured plan have a 25% higher customer satisfaction rate due to better alignment with user needs.
As we can see, the figures are extremely convincing, so why don’t we proceed with the components of your future approach?
What is a product development strategy
A product development strategy is a comprehensive plan that outlines the vision for the product, the target market, development phases, resource allocation, and go-to-market tactics. Let’s look in a bit more detail:
- Market Research should be conducted to understand customer needs, trends, and competitors. Think of Slack performing extensive analysis to identify pain points in team communication, leading to its user-centric design.
- Product Vision defines what you want to achieve with an app. For example, Google’s search engine aimed to make word data universally accessible by organizing it.
- Development Process including the steps from concept to launch with timelines, milestones, and responsibilities. For instance, Zara uses a fast fashion model with a streamlined development that quickly adapts to the latest trends.
- Go-to-Market Strategy to plan how to introduce the product to the consumers, including sales and distribution tactics, such as using a freemium model to attract users and then upsell premium features, similar to Spotify.
- Feedback Mechanisms that set up ways to gather and act on user reviews to refine the product. Recall the evolution of Airbnb. The organization continually iterates its platform based on user opinions to enhance the user experience.
A well-defined product development strategy serves as a blueprint for ensuring that the end result and its creation process are aligned with business goals and market demands, contributing to a successful launch and sustainable growth.
What types of product development strategies are there
There are four main criteria to classify product development strategies: market focus, innovation type, resource allocation, and customer involvement. We should analyze all of them in detail:
By Market Focus
You might choose to target an existing market or conquer new audiences.
Existing Market Focus leverages existing customer bases and market knowledge to introduce variations or improvements. That’s what Coca-Cola did by introducing limited-edition flavors and new packaging formats to engage existing customers and boost sales within established markets. This approach provides lower risks due to familiarity with the market and is a good opportunity to deepen customer relationships.
New Market Focus often involves developing products tailored to the needs of new audience segments, expanding the reach, or conquering blue markets. A famous case is Tesla entering the automotive industry with electric vehicles, targeting a new market of eco-conscious consumers and tech enthusiasts. A new market approach brings the potential for high growth by tapping into new customer segments and allows the establishement of a strong market presence early on.
By Innovation Type
The originality level of your new product can also be different: from incremental and sustaining to radical and disruptive.
Sustaining Innovation enhances existing apps to maintain competitive advantage and meet evolving customer expectations. Generally speaking, it’s about making improvements that support the product’s market position. For instance, Intel continuously upgrades its processor technology to offer better performance and energy efficiency, which helps to maintain leadership in this field, as well as customer loyalty. The main benefit of this approach is ensuring relevance in a competitive landscape.
Incremental Innovation involves making small and gradual enhancements to existing products or processes. It’s characterized by refining and optimizing rather than radically transforming, just like Microsoft regularly updating Windows with new functionalities, performance improvements, and security patches. With smaller steps, you minimize risk and often have a shorter development cycle, along with lower costs compared to more significant changes.
Radical Innovation introduces groundbreaking products that alter the existing markets or create entirely new ones. A known specimen is Apple’s iPhone, as it revolutionized the technological industry by being at the same time a phone, a music player, and an internet device.
By choosing a revolutionary approach, you can capture a large market share and set completely new industry standards. Consequently, it often leads to high rewards if successful, yet it’s more risky.
Disruptive Innovation creates new markets or suspends current ones by offering a new value proposition that significantly changes how things are done. At some point, Uber transformed the traditional taxi industry with its ride-sharing model, offering more convenience and lower costs.
Basically, such tactics allow you to achieve rapid growth and dominate new markets, usually leading to substantial shifts in industry practices.
By Resource Allocation
In terms of assets, you have to choose between the intensive approach or a lighter one, considering your capabilities and needs.
Resource-Intensive Development requires significant investment in terms of time, money, and expertise. It’s a common choice for complex projects with high development costs. A typical example is pharmaceutical companies investing billions in drug creation, including clinical trials and regulatory approvals. Such tempo often leads to groundbreaking advancements or significant market impact.
Resource-Light Development, on the other hand, focuses on making products with minimal spending. That’s why it often uses lean principles to test ideas quickly and cost-effectively, like startups creating MVPs to test market hypotheses and gather early feedback before investing heavily. By selecting this type, you can reduce risk and upfront costs, iterate quickly, and pivot based on feedback.
By Customer Involvement
The last decision for you to make is whether to consider your clients when creating the product or not.
Customer-Driven Development presupposes directly engaging with users to guide product making, ensuring that the result meets their needs and preferences. Look at how Dell allows buyers to customize computer specifications, ensuring the final result aligns with their requirements. In general, engaging the customers increases the chance of market acceptance and user satisfaction.
Internal Development, on the contrary, relies primarily on inner teams and their expertise for the project creation, with limited external input. For example, Google often creates new features and products based on internal research and innovation. This way, you can effectively leverage your team’s knowledge and capabilities and have greater control over the implementation process.
Each of these approaches provides a different lens through which to view and execute product development strategies. The best one depends on your specific objectives, market environment, and resource availability.
Developing a Strategy for Product Development
Formulating a strategy for product development involves several steps designed to align with both business objectives and market demands:
- Clarify Vision and Objectives
You should start by distinctly defining the aims of your new application and understand whether they align with the business blueprint. It’s highly recommended to set SMART goals, such as revenue objectives or expected levels of customer satisfaction.
- Perform Market Research
Once goals are set, your next step is to assess their feasibility. Collect and analyze information to understand trends, consumer needs, and the competitive landscape. Surveys, focus groups, and market analysis tools come in handy to gain insights into user preferences and potential differentiation opportunities.
- Design a Product Concept
When you know your idea will face demand, create a detailed description of your application, encompassing its features, benefits, and target audience. In addition, you need to highlight its unique value proposition, as well as how it addresses customer pain points and needs.
- Create a Business Canvas
Now it’s high time to calculate the profitability. Business canvas is a perfect tool for this task, as it includes the expected costs, revenue projections, and return on investment (ROI). What is more, it can be used to justify the funding, as it includes a cost-benefit analysis and financial expectations.
- Plan the Development Process
Since a clear product vision is established, you need to define the approach, necessary steps, timeline, and resources needed. As a result, you will achieve a formulated project plan with milestones, deliverables, and responsibilities.
- Allocate Resources
It’s better to determine the budget, team members, and other resources needed before starting the implementation process. Additionally, you need to assign roles and duties, along with ensuring the necessary tools are in place.
- Develop and Test Prototype
To test and validate the app’s concept, create an MVP (Minimum Viable Products). Of course, it can be tempting to map out the whole application at once. However, it’s better to use iterative testing and feedback to refine the product design and features.
- Formulate a Go-to-Market Strategy
There’s no need to say that planning the product launch and reaching your audience is indispensable to ensuring your future success. That’s why marketing, sales, and distribution tactics should be carefully examined and prepared to ensure a smooth app launch.
- Monitor and Iterate
After the product release, you can finally track its performance and collect valuable user feedback to make improvements. Using analytics, customer reviews, and market data can significantly facilitate the process of ongoing transformations.
Conclusion
Typically, the product improvements never stop. So, after the first success, your app will keep evolving, growing, and bringing even more value. A well-structured approach can make this process simpler and more effective. Moreover, with its help, you can create products that meet and even exceed market expectations.