Product Strategy and Strategic Thinking

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2.1 What strategy is (and is not)

Strategy is a set of choices about where to play (which customers, problems, markets), how to win (why customers pick you over alternatives) and what not to do — backed by the capabilities and economics to sustain it. A strategy that does not exclude anything is not a strategy.

2.1.1 Vision, mission, strategy, roadmap

2.1.2 Strategy versus roadmap

A roadmap is derived from strategy; it is not strategy. A strategy says “we will win on trust and price clarity”; the roadmap lists the bets that express it. If a roadmap can be read as a list of unrelated requests, the strategy is missing.

2.2 From business objective to product decision (the cascade)

PMs translate company goals into product choices through a cascade. Worked example:

Method: (1) restate the business objective with a number; (2) diagnose the biggest lever (funnel, cohort, unit economics); (3) choose a segment and problem; (4) define the strategic bet; (5) set outcome metrics and guardrails; (6) pick the cheapest experiment that reduces the biggest risk.

2.3 Market analysis

Market analysis answers: how big, how fast, who competes, what is changing, and where are the gaps. Use secondary research (reports, filings, company databases, news) to frame the landscape and primary research (interviews, surveys) to learn what customers actually do.

2.3.1 Market sizing: TAM, SAM, SOM

• TAM — total addressable market: demand if you captured everything your product could serve.
• SAM — serviceable available market: the part you can actually serve with your offering, geography and channels.
• SOM — serviceable obtainable market: what you can realistically win in a stated period.

Prefer bottom-up sizing (users × frequency × price) over “1% of a huge market”.

2.4 Competitive intelligence

Process: (1) define the customer job; (2) list alternatives incl. “do nothing”, spreadsheets, manual workarounds; (3) compare on a few user-relevant dimensions; (4) record evidence and date; (5) ask “which differences actually matter to customers?”

2.4.1 SWOT

SWOT organises Strengths and Weaknesses (internal) and Opportunities and Threats (external). It is a summary tool, not an analysis: each item needs evidence, and the real value is the so-what — which strengths address which opportunities, which weaknesses expose which threats.

2.4.2 Porter's Five Forces

Porter's Five Forces assesses the structural attractiveness of an industry: rivalry among existing competitors, threat of new entrants, threat of substitutes, bargaining power of buyers, and bargaining power of suppliers. High force intensity → lower profit potential.

2.4.3 PESTLE

PESTLE scans the macro environment: Political, Economic, Social, Technological, Legal, Environmental.

2.5 Segmentation, Targeting and Positioning (STP)

• Segment — divide the market into groups with shared needs/behaviours (not just demographics).
• Target — choose which segment(s) to serve first, based on need severity, size, strategic fit, reachability and ability to pay.
• Position — define how the product sits in the target's mind relative to alternatives.

2.5.1 Value propositions

A value proposition states the benefit a customer gets and why it beats alternatives. The Value Proposition Canvas pairs the customer profile (jobs, pains, gains) with your value map (products/services, pain relievers, gain creators). Fit exists when your relievers and creators address the pains and gains that matter most.

2.6 Business models: Business Model Canvas and Lean Canvas

The Business Model Canvas (Osterwalder) describes nine building blocks. The Lean Canvas (Ash Maurya) adapts it for startups: it replaces Key Partners, Key Activities, Key Resources and Customer Relationships with Problem, Solution, Key Metrics, Unfair Advantage.

2.7 Differentiation, competitive advantage and moats

Differentiation gives customers a reason to choose you that rivals cannot easily copy. A competitive advantage is durable only if it resists imitation; such protective features are often called moats.

2.7.1 Blue Ocean Strategy

Blue Ocean Strategy (Kim & Mauborgne) advises creating uncontested market space by making competition irrelevant, using a strategy canvas: plot competitive factors on the x-axis and offering level on the y-axis, then use the Eliminate–Reduce–Raise–Create grid to reshape value.

2.8 Build, buy or partner

Decision questions: Is it core to our differentiation? How fast do we need it? What is the total cost of ownership over 3 years (including maintenance and vendor fees)? What is the switching cost if the vendor fails? What data and compliance obligations apply? Could we start by buying and later build once learning proves the need?

2.9 Strategic trade-offs

Strategy is about saying no. Typical explicit trade-offs: growth vs profitability; breadth vs depth; speed vs quality; acquisition vs retention; customer-specific requests vs platform consistency; exploit the core vs explore a new bet. A useful practice: write “We will not…” statements (e.g., “We will not compete on discount depth; we will compete on transparency and reliability”).

2.9.1 Growth options: the Ansoff matrix

2.10 Pricing and monetisation strategies

• Pricing — how much and on what terms customers pay. Monetisation — the broader way the product earns revenue.
• Anchor on value to the customer, then check cost, competitor prices, willingness to pay and trust. Cost-plus alone ignores value.

2.11 Objectives and Key Results (OKRs)

An objective is a qualitative direction; key results are measurable changes that indicate progress; initiatives are the work you believe might move the key results. OKRs are not a task list or an automatic performance score.

Tips: 3–5 objectives max; 2–4 KRs each; stretch but plausible (many teams aim for ~70% achievement on ambitious KRs); review weekly; separate committed deliverables from aspirational goals; pair outcomes with guardrails.

2.12 Product portfolio strategy

Larger organisations manage multiple products and must allocate resources across them.

• BCG growth-share matrix — classifies products by market growth and relative market share into Stars (high/high), Cash cows (low growth/high share), Question marks (high growth/low share) and Dogs (low/low). It guides investment but oversimplifies and depends on how markets are defined.
• Three Horizons — H1 optimise the core, H2 build emerging businesses, H3 explore future options; allocate effort and expectations differently (the commonly cited “70/20/10” split is a rule of thumb, not a law).
• Portfolio questions: Which products share customers or infrastructure? Where do we cannibalise ourselves? Which should we sunset to free capacity?

2.13 Go-to-market (GTM) strategy

GTM is the plan for getting a product to the right people and helping them use it. Module 8 covers launch plans in depth; here are the strategic pieces.

2.14 Strategy in practice: a worked mini-case

2.15 Source-flagged corrections

• Strategy ≠ roadmap ≠ vision; they are layers.
• Ansoff labels: see above.
• Five Whys and first principles are related but different (Module 4).
• A survey preference is not proof of purchase; PMF needs behavioural evidence.
• Segmenting by largest size alone does not prove fit.

2.16 Exercises with model answers

2.17 Interview perspective

2.18 Key takeaways

• Strategy = choices (who, what, why us, what not). Roadmaps follow strategy.
• Use frameworks (SWOT, Five Forces, PESTLE, STP, canvases) to organise thinking, then validate with evidence.
• Size markets bottom-up, show a range and name the weakest assumption.
• Moats are specific: network effects, switching costs, scale, brand, data — test each claim.
• Price on value, check unit economics, and run price tests with significance and churn in view.
• OKRs: objective (direction) + measurable key results + guardrails; not a task list.
• Always write down what would change your mind.

2.19 Check your understanding

2.20 Recommended resources

• Strategyzer: Business Model Canvas and Value Proposition Canvas.
• Harvard Business Review: The Five Competitive Forces That Shape Strategy (Michael Porter).
• Blue Ocean Strategy — official site.
• Lean Canvas (Ash Maurya).
• Atlassian: Product management — roadmap and strategy guides.
• What Is OKR? — Google re:Work.