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design:product_strategy

Product Strategy

Setting a product strategy means setting a direction for your project.

Situation

Following the design roadmap, you've collected enough information to determine both how things are (the initial situation), and the expectations of your user groups (the preferred situation). You have collected a significant amount of information - more than you can probably remember for the rest of the project. Also, the decisions you make now, at the strategic level, really need to be fixed for the rest of the project, or you will be trying to “hit a moving target” and the odds of developing a good design will drop significantly.

From an academic perspective, you also need to be able to demonstrate to your instructor that you have thought through the strategic needs of your project.

On the other hand, you do not want to make too many commitments at this early point in the design process, or you will unnecessarily overconstrain your thinking.

Therefore

To address these needs, you can create a product strategy, which distills everything you have learned so far and makes certain overall commitments to the general direction of your project. You document your strategy in a product strategy specification (PSS).

What is a strategy?

A product strategy is a description of the direction, tone, and philosophy that is to be captured by your design. It's usually no more than a paragraph or two long, but can be as short as a single sentence.

The strategy must capture the essential purpose of the particular product. To say that the essential purpose of a car is to move people around misses the point entirely. To move people around is just a physical function that cannot lead a team towards a good solution. A better purpose for a car might be: comfort, enjoyment, family. We don't mention safety here - safety is mandated by regulations for cars. A strategy isn't a sales pitch; it's a statement of the design team's intention for the design team itself and not for the users of the design intervention.

Some examples of good product strategies are:

  • Original Palm Pilot: to compete directly with leather-bound agendas for executives1).
  • Apple iMac: extreme usability and fitting into a particular lifestyle.
  • Smart Fortwo: safety and efficiency without compromising youthful appeal.

Because engineering is all about the “nitty gritty details”, it's often the case that a good strategy needs to reflect a number of engineering (and other) issues. The most often encountered issues are described below. Note that not all these issues will pertain to every design intervention; and in some cases, there will be extra issues that aren't covered here.

So review the issues below and discuss them in your teams. Make sure you all know why a specific issue needs to be reflected in your strategy. You will find that some of these decisions are obvious from your design briefs.

Product strategy issues

Of course, developing a product strategy can be very complicated. A number of issues need to be considered, depending on the situation.

Usability and User Breadth: Develop a good understanding of your user groups.

Market Segment: At what kind of users are you targeting your product? If you're designing a new electric razor, you might target men aged 18 to 45 years, or men aged 30 to 50 years. What is implied by the two age groups? What impact would this have on the razor's design? How will you make your razor appeal to the members of the market segment? If you're designing an industrial robot, you would naturally target a specific industry (say, the automotive manufacturing industry). But does Mercedes Benz buy the same robots that Tata buy? What might drive those companies to buy different robots? Notice that the market segment is a refinement of one of your user groups.

Degree of Innovation: Are you looking to turn an industry on its head (e.g. Apple's introduction of the original Macintosh)? Are you looking to radically alter performance, function, efficiency, cost, or some other major feature of a class of products? Are you looking to develop a kind of product that has never existed (e.g. the original Palm Pilot)? If so, then you are looking for highly innovative design solutions. Alternatively, you may be looking for only an incremental improvement to address identified, but minor, problems in an existing product, or to keep a product “fresh” in the market. This would be a low-innovation approach. Perhaps you only want to innovate in a part of the product - like making a very conventional-looking SUV that has a hybrid power system.

Functional Complexity: Will your product do everything but walk the dog, or will it be simple and spartan of features? How many “bells & whistles” will it have? Why? What is the impact of the degree of functional complexity on the other strategic goals?

Time to market: How long have you got to get this design into the market? Is it a design intervention that must be on the market in six months? Or can you plan for six years of development time? Obviously, this will influence every aspect of your design. Imagine what could happen to any technology you might want to use in your design intervention in six years….

Production: How many items of the product total would constitute a good “run”? How fast (number of items per year, say) must the product be made? If Boeing has a complete run of 400 planes of a particular model over several years, then that is considered a great success. However, Ford must be able to make 50,000 cars of a particular model each year to claim a similar success.

Environmental Concerns & Maintainability: What potential good and bad impacts may/should your product have on the environment? Don't just think of, for instance, how much pollution may increase or decrease because of your product, but what the effect of that increase or decrease in pollution will do to people, other organisms, ecosystems, and climate2). Does your product make beneficial use of available material that would otherwise be considered waste? Does it produce “waste” that is known to be useful to some other process, product, or system? What is the impact of maintenance (replaced parts, fluids, catalysts, etc.) on environmental concerns? How can you design maintainability into your product so as to prevent environmental damage?

Profitability: What amount of profit do you expect to generate from a given product? What kind of mark-up is expected by the various wholesalers and retailers who might typically be involved in distributing and selling your product?

Risk: Any new undertaking involves some risk. The risk must be such that the development organization is comfortable. There are two key parameters of any risk: the severity of its impact, and the likelihood of it happening. This not only involves the risk of developing and marketing the product, but also the risks associated with using the product (and the consequential potential liability).

Cost: This includes the cost of mounting the development project, and the cost of the product. Product cost is often initially estimated based on existing similar products. Even in the case of new product development, since the product will be used to do something done in some other way, there is always competition – e.g. the original Palm Pilot's competition was a leather-bound agenda. Overall life-cycle costs (from design, through manufacture and assembly, supply chain, and use, all the way to end-of-life) are also of concern here3).

Customization: An emerging area of interest in product development, customization is the capacity to make relatively minor variations in a product to provide special, but not necessarily functional, features that appeal to “sub-markets”. For example, in it's heyday, the Sony Walkman (cassette tape version) was available in over 300 models in Japan, because everyone wanted “their own”.

Naturally, all these issues are interrelated. For example, the degree of innovation of a product may be driven by, or drive, decisions regarding market segment. You should make sure that you consider how the decisions you make in one issue affect how you treat the other issues.

In industry, there would be even more issues to consider, but within the confines of an academic exercise we do not need to consider issues of, say, resource allocation. Indeed, in “real life,” product strategy is often part of a corporate business case for a new product. A business case involves a detailed analysis of the financial, technological, and resource health of an enterprise, which is used to justify the undertaking of a product development project. Obviously, the product strategy plays a key role in evaluating a business case.

Based on the information that you have gathered in the preceding steps of project initialization, you should be able to nail down reasonable expectations on all these issues relatively quickly.

Deliverables

But

Product strategy is something done while treating the design intervention itself as a black box; that is, you do not think about the intervention, but rather it's role and purpose in a larger system. Be careful to try to exclude any references in the product strategy to internal aspects of your design intervention (shape, materials, etc.) unless those aspects are already defined in the design brief.

There is no real way to know if your strategy is “correct” until the end of the design process. You would prefer to not change it; still, there is a small but distinct chance that, by the end of your project, you will have to revise your strategy (slightly) in light of information that becomes available during some subsequent design task. Remain flexible enough to adapt your project if this happens - it will lead to better design outcomes.

Much of the information needed to create a “real” product strategy falls outside typical engineering tasks. In the real world, engineering designers should be participants in strategy development in collaboration with marketing, business, and other experts from outside engineering. However, such expertise is typically not available for student projects in engineering curricula. This means your product strategy may not be as good as you might think. Instructors recognize this and will take it into account when assessing your design work. The important thing is to demonstrate that you have tried, within the bounds of your education and experience, to address the main issues of strategic importance.

See Also

Methods that can help to set the product strategy:

The Haier Group, a Chinese appliance maker, developed a special extra-large washing machine to appeal to the Saudi Arabian market. The extra-large drum accommodates the bulky robes that Saudi's tend to wear. At the same time, however, Haier also makes a similar — but tiny — washing machine for rural China that costs just $38. And a dishwasher made for US markets features controls on the top of the door, which makes them easier to reach and see when the user is standing. (This was done in response to complaints by American consumers that it was inconvenient to control the machine from the front, which is difficult to see — note the importance of responding to the user and not necessarily the client here.)

Another Chinese equipment manufacture, when contracted to develop a specialized industrial-capacity, bread-making machine, send its engineers to baking school so that they could learn how the bread was made by hand. Armed with that learnt knowledge, the engineers were then well-positioned to develop a product that could reach a sufficient level of bread quality.

1)
For more details about the Palm Pilot's invention, see Palm Pilot requirements case study.
2)
Example: a new immunization technology could push immunization rate in some community above 80% - though the specific level varies according to the disease considered - which then causes herd immunity, which then improves health outcomes even for those who are not immunized.
3)
As the true global cost of consumption of engineered products becomes more evident, there will be an increased need to manage those costs.
design/product_strategy.txt · Last modified: 2020.03.12 13:30 (external edit)