May 19 2025 |
What is a Product Development Strategy?
A product development strategy outlines your company’s steps to develop new or modify existing products.
A product development strategy defines the approach and resources required to develop new or modify your company’s existing products.
A product development strategy covers:
- Resource Requirements: Details on resources, such as R&D personnel and finances required to develop or modify your products
- Processes and Timelines: Details of manufacturing and production processes and timelines to develop a product
- Market Dynamics: Analysis of market size, customer needs and any similar products already in existence and their market share
- External Agreements: Details of any third-party arrangements such as technology sharing or joint venture for product development
Why is a Product Development Strategy important for business today?
A product development strategy enables your company to:
- Define the short and long-term goals for developing and modifying your products
- Prioritize product pipeline based on your company’s goals and objectives
- Develop a baseline estimate for financial and labor resources required to develop a product
- Assess the market potential and business opportunities for your product lines
Why is a Product Development Strategy important for an event tomorrow?
A product development strategy is important for an event tomorrow, as it helps:
- Benchmark against historical product development strategies and timelines to assess the reasons for any volatility
- Analyze the financial and operational risks involved in your company’s product strategy
- Evaluate the costs incurred by your company in developing and modifying your products
- Determine your company’s manufacturing and technical capabilities and your reliance on third party expertise
- Assess the competitive advantage of your company’s product portfolio against your competitors
- Measure the effectiveness of product-specific strategies adopted by your company against market performance
Pros of addressing Product Development Strategy
- Formulate product development goals and review progress across different stages of development
- Plan for resources in areas of expertise required in creating a new product
- Understand and measure in advance the market share, demand for and growth of new, planned products
- Optimise resource allocation based on new product launches or market timelines to modify and re-launch existing products
- Respond to customer demands in identified market niches
Cons of not addressing this topic
- Creates ambiguity in the internal procedures to be followed to develop products
- Procedures on product development and modification are not followed or recorded
- Inability to keep stakeholders informed of the product development process and outlook
- Lack of planning means there is a potential to develop products that have low market attractiveness
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