120 CHAPTER 6 THE CORE OF YOUR PLAN
Incidentally, when thinking about your product strategy, take into account where you are
in the product life cycle. This is such an obvious point that I almost forgot to mention it
here. The cycle is illustrated in Chapter 8 because it is useful to discuss it in detail when
forecasting sales. Essentially, sales growth is slow when new products are introduced,
it accelerates rapidly as market awareness increases, but eventually levels off and then
declines when the market is saturated. The trick is to keep revitalising products to extend
their life cycle.
Product line depth and breadth
Quality durability, appearance, reliability
Features fulﬁls users’ needs
Simplicity basic product
Volume economies of scale
Skills efﬁciency, automation,
Synergy pooling costs with other units
Integration vertical (supplies to sales)
Step 1. Select approach Step 2. Identify focus
Industry speciﬁc competitors
Product speciﬁc niche products
Market speciﬁc niche segments
Territory speciﬁc localities
Figure 6.2 Two steps to a winning product strategy
A product strategy is an excellent bridge between business and
departmental strategies. It helps you develop R&D, production and
marketing strategies that are fully integrated.
It might seem obvious to us that everyone should be pulling in the same
direction, but inspection of many companies suggests that this is not always clear.
All too often, marketing, production and R&D are all doing – and promising –
different things. Sad but true.