Product strategy defines the direction of a company’s innovation and new product development activities. Global expansion has run its course and global markets are reaching the saturation point. Companies must expand by innovating new product categories. The growth trajectory is to harness product strategy and planning as a competitive differentiator.

Product strategy defines what products to develop, as well as how and when.

• Product plans create a timeline for developing new products and a roadmap for realizing a product portfolio,
• They define the sources of new products, whether developed internally, acquired from the outside, or purchased and rebranded for resale.
• They encompass all of a business’ product lines, both mainline and derivatives.

As emerging markets have matured, the competitive advantage derived from global distribution has diminished. The most reliable way for companies to ensure continued growth is:

• To introduce new products in new categories, or,
• To wrap new products and services around a core product, augmenting the offering. 

With new operational models that leverage global manufacturing and design partners, a company can be a very effective competitor with limited financial resources. Product strategy is the key capability that cannot be outsourced.

• Small firms that harness this capability can become market share leaders with limited fixed resources or overhead.
• Larger companies need to develop a robust product strategy and planning capability if they wish to avoid being outflanked by these smaller, agile competitors.