How to Build a Successful Product Development Strategy

To remain competitive in today’s ever-changing and ever-expanding marketplace, companies must think carefully about what products they are developing. and It’s about developing a process by continuously iterating to maintain a competitive advantage. A fine-tuned product development strategy is a holistic, collaborative effort that can help any organization navigate unexpected events or market changes.

Why is a strong product development strategy important?

Consumers have access to more information than ever before to compare products and brands. The relentless pace of technological advancement can cause even the most innovative startups to find once-successful products suddenly underperforming or becoming obsolete. And for established institutions with strong brand loyalty, existing products alone may not be enough to remain competitive in the long term.

Product development cannot be a blind process, as new markets and features emerge almost overnight. Successful companies blend product development practices with overarching business strategies to ensure sustainable innovation that efficiently and consistently resonates with customers, both in existing markets and new target audiences.

A successful product development strategy includes:

• Diversify your product portfolio
• Improve customer experience
• Improve sales and return on investment
• Support for growth strategy
• Support for transition to new markets

Traditionally, there have been three ways for a business to grow through product development:

1. Create an entirely new product
2. Adapt existing products to fit your target market.
3. Strengthening products to enter new markets

But delivering a better product or manufacturing it at a lower cost is only a small part of a successful product development strategy. Today, half of all companies and 70% of top performers use internally developed software to differentiate themselves in a crowded marketplace. As more and more companies transform into software businesses, a long-term development strategy that prioritizes continuous feedback and core organizational values ​​is the key to success.

7 Steps to a Product Development Strategy

Although individual organizations may use slightly different templates, and there is certainly no universal strategy to ensure successful commercialization of an idea, there are seven common steps in the product development process.

Typically, these actions should be accomplished through a dedicated development team or a product development partnership with an experienced, professional consulting firm. The goal is to structure the development process from brainstorming to launch, outline important benchmarks, and allow cross-departmental collaboration and review by multiple stakeholders. The seven stages of product development are:

1. Idea generation

Companies must prioritize their long-term strategic goals and core competencies to brainstorm new initiatives, product ideas, or product features. At this stage, cross-collaboration efforts should focus on ideation and iteration. Considering customer needs and business strengths, the product team creates product concepts. We take signals from multiple departments and business leaders to sift through these ideas to ensure that only those that best align with the organization’s goals move forward.

2. Research

In this stage, the new product idea is placed in the context of the current market. Companies can conduct market research, solicit customer feedback, or participate in focus groups related to a new feature or product line. During this process, companies must conduct extensive research on similar products and thoroughly examine the competitive advantages of the new product over others to accurately predict future market share. All of this effort culminates in validation of new ideas that help business leaders understand how their products will perform.

3. Planning

Once the idea has been validated, the planning phase of the new product development process begins. This can involve collaboration between product design teams, project management, sales, and other departments as companies create detailed roadmaps for how new products will be built and deployed. This may include plans to integrate new ideas with current products or existing business structures. Depending on the product, this step may include wireframing and modeling, as well as material costs or server space costs.

4. Prototype

Prototyping is an important step in the product development process. Companies often create multiple prototypes and make significant changes to the original plan as they assemble a model of the final product. Sometimes you may need to build several variations with different features, materials, or performance.

The end goal is to create an MVP (Minimum Viable Product). An MVP is the most basic version of a new product without most of the extensive integrations or features that can be added over time. These will be samples as materials and suppliers are sourced for mass production. In software applications, it can be important to test prototypes with end users to ensure a proper user experience.

5. Sourcing and Manufacturing

At this stage, companies collect materials and contracts with partners, if necessary, to develop detailed plans for actual production. Depending on the scope and nature of your product, this can be as simple as hiring additional engineers or as complex as implementing new supply chain processes across your organization.

Product management teams are becoming increasingly important because sourcing can require extensive collaboration across suppliers and across multiple processes. If there are complex global sourcing and manufacturing requirements, companies may choose to use software or databases built specifically for the task.

6. Cost calculation

In the final step before launch, companies must calculate the total cost of the product over a predetermined product life cycle to determine the retail price and gross margin of the new plan. Detailed consideration of business value, customer value, and product value helps guide and simplify the cost calculation steps by helping to facilitate accurate estimates of return on investment.

7. Commercialization

After a long design process, the time has come to launch the product. Prior to launch and during planning, a marketing strategy will be developed to ensure that the new product is accessible to target customers and that appropriate distribution channels are available.

Development Process and Development Strategy: Thinking Holistically for Long-Term Success

good Product development prioritizes production or distribution on time and on budget. exorbitant Product development prioritizes value-based outcomes over the entire life of the product.

Before considering how to implement a product development process, it is important to take a step back and evaluate your company’s core competencies and potential long-term needs.

• What are the organization’s intrinsic strengths and skills?
• How do these capabilities work together in unique ways?
• What capabilities might you need in the future?
• How do these capabilities align with the organization’s long-term strategic business plan?

Whether it’s the ability to deploy software quickly or strong strategic sourcing, ranking these strengths can be useful to gain a deeper understanding of where your business stands today. Some researchers recommend plotting these variables on a simple graph, depending on how strategically important they are and how strong their current position is in the company.

As the early stages of the product development process begin, organizations should evaluate how their product roadmap will address and measure three important types of value:

1. customer value: This metric describes the measurable impact when customers use your product, which is essentially the underlying value proposition. Can the proposed product or feature meet an unmet need?
2. business value: Measure product results against key performance indicators (KPIs) and in the context of your broader business strategy. Does the product or feature create specific, measurable business value?
3. product value: This metric evaluates how much a product or service will be used compared to the resources needed to build and maintain it. Will the benefits of the product or feature outweigh the increased engagement and resources consumed?

Tracking these metrics can help your organization create a structured plan for prioritizing products and features. Even the most popular product won’t be successful in the long term if it wastes resources or doesn’t align with the broader goals of your business. These three value metrics are just as important after your product launch as they are during the initial brainstorming session. Testing a product and carefully assessing its success should be an ongoing, ongoing outcome rather than the final stage of development.

Testing as a process, not a final step

Historically, testing a new product development strategy may have been the final step of a project. But in today’s environment, smart business leaders deliver continuous, value-based testing iteratively throughout the life of a product.

The final step in a successful product development strategy is open. This includes regular data collection to analyze how the product reflects the organization’s broader business goals. This might include soliciting user feedback through social media, tracking retention rates internally as customers use new products, or regularly auditing your products to ensure they are capturing the best possible value for both consumers and your business.

Product Development and IBM

Today’s business leaders must completely rethink their capabilities, operations, and workflow design and sequencing to unlock, connect, and use data where it is most effective.

IBM Engineering Lifecycle Management (ELM) is a market leader, a comprehensive, end-to-end engineering solution that seamlessly guides you from requirements to system design, workflow and test management, and extends the capabilities of ALM tools for more complex environments. -System development. By adopting an end-to-end view of the entire product lifecycle and implementing a digital foundation for data traceability, you can more easily track changes, minimizing risk and reducing costs.

Explore IBM Engineering Lifecycle Management (ELM)