In this guide, we’ll explain the difference between strategy and tactics and explore how each impacts the other.
A strategy describes the long-term vision of what a product or service will look like and how it will serve customers’ needs. Tactics are short-term actions that are designed and prioritized to help the product development team achieve the product strategy.
Let’s take a closer look at what a product strategy and tactics entail and how they impact each other.
Strategy is the overarching, guiding direction and set of principles that steer the direction for the product and product organization. It is closely tied to the vision of the product and the overall business.
Put simply, the product strategy helps establish a plan for achieving the product vision, which levels up to business objectives.
The product vision can be for a single product or a portfolio of products. The product strategy for each product derives from the overall product vision.
Strategy is established as a high-level guidance. It is set at the leadership/executive level and is long-term. The strategy helps establish the purpose of the product and therefore provides the direction for the teams and all the stakeholders involved.
Tactics are obtained by breaking down the product strategy into more actionable steps and establishing a sequence in which to execute these steps to accomplish the product strategy and vision.
The word “tactics” is derived from the Greek word “taktos,” meaning “ordered, arranged.”
Tactics are focused on short-term goals and are more tangible than strategies. In the simplest terms, tactics are the execution steps needed to accomplish the product strategy.
To show what a product strategy looks like in practice, let’s take a look at three notable real-world examples:
These three tech giants are the leaders among internet-age companies. What makes their respective product strategies so successful?
For one, the three strategies described above are primarily driven by customer needs. These companies are heavily customer-centric, meaning they are driven by their customers’ goals and pain points and focused on solving the problems and/or adding value for the customer
For example, note the key phrases “…big problem…,” “…consumers and business owners…,” and “…in friendly, straightforward way…” from the product strategy statement examples above.
Secondly, these strategies are driven by simple, yet innovative goals and themes — e.g., “…in a novel way…,” “…fast, easy entertainment in a friendly straightforward way…,” etc.
These product strategies look quite similar on the surface, but it’s important to note a few key differences:
Google leverages, prioritizes, and invests heavily in its research to back its strategy, as well as in product development at the core. Therefore, the reference to “technical insights” in Google’s strategy theme is powered by this research focus. Comparatively, Amazon and Netflix are not as heavily invested in research to power their respective strategies.
Netflix has a very niche focus segment of the movie subscription business; it basically developed its business strategy on the back of being a game-changer. Netflix started off in the space of DVD rentals before pivoting to an electronic media streaming platform.
Meanwhile, Google and Amazon have a very large footprint in terms of their business presence. Google business ranges all the way from online advertising, to search engine technology, to cloud computing, computer software, quantum computing, ecommerce, artificial intelligence, consumer electronics, and more. Amazon’s business presence is equally diverse, ranging from ecommerce, cloud computing, online advertising, digital streaming, and artificial intelligence.
The bottom line is that while Amazon is a customer-first company, Netflix and Google are technology-first companies.
Now let’s look at examples of product tactics associated with the aforementioned companies’ respective strategies:
Strategy and tactics are closely looped together. Tactics cannot exist without a strategy.
Strategy is the high-level umbrella and guiding direction from which the tactics are derived.
By breaking down the strategy into actionable format and steps, you can formulate the tactics or tactical plan.
Lets refer back to the examples referenced in the previous section and explore how the high-level strategy impacts the tactics and vice versa:
Google’s strategy emphasizes using the tech behemoth’s research and technical prowess to solve customer problems innovatively. In line with this, Google’s tactic to achieve this strategy is to prioritize the product usage over generating revenue from their products — i.e., monetization.
The more the customers use Google products, the more research and insights Google is able to generate into customer behavior, customer needs, and customer usage patterns. This helps product teams glean valuable technical insights and enrich their products.
Amazon’s strategy focuses on becoming an integral part of consumers’ lives. The company’s tactics are derived from this strategy and endeavor to be customer-obsessed.
The goal of these tactics is to provide a superior customer and technological experience, which will ensure that Amazon is embedded seamlessly into the daily lives and actions of its target customers.
Netflix’s niche product strategy was initially to be a movie subscription business that enables customers to acquire content in a fast, easy, and user-friendly manner. Its product tactics focused on going digital by providing an online streaming service, which Netflix determined is the fastest and most efficient way to delight users.
This tactic has helped Netflix to achieve its strategy, enhance its margins, and make it a profitable business model.
An effective product strategy is one that, along with the product vision, helps you define:
Furthermore, your product strategy should:
The product strategy should be clear in what it is trying to achieve and well-rounded. It should set a clear direction for the product and product organization.
The product strategy should help you establish the product roadmap. In other words, the product roadmap should be inspired by the product strategy and the product vision coupled together.
The product strategy should be defined in such a manner that it encapsulates the target customers and therefore helps you define and identify the target customer base for the product(s).
As mentioned previously, the product vision and product strategy go hand in hand. So the product strategy should be aligned with and extend the product vision.
It would not be wrong to say that, in some instances the product strategy is derived from the product vision.
Last but not the least, the product strategy should lay the foundation for the product tactics. The product tactics are derived from the product vision.
Therefore, the product strategy should be defined so that it can clearly flow into defining the product tactics. Summing up the product tactics at a high level should yield the product strategy.
They key to creating good tactics, also called tactical steps, are as follows:
The product strategy, as mentioned, provides a guiding direction to the entire product organization and all the stakeholders who are involved in the product development lifecycle.
Let’s quickly summarize some of the benefits of establishing a strong product strategy with clear, impactful tactics. A product strategy should:
An important step is to establish metrics to measure how they contribute to the product’s success:
There are numerous categories of metrics and key performance indicators (KPIs) you can use to measure the effectiveness of your product strategy, but the most relevant are the metrics impacting customer engagement and return on investment (ROI), such as:
Define and measure the performance of your key performance indicators (KPIs) that matter most when it comes to evaluating your product or business. Assessing your KPIs can help you measure the impact and effectiveness of your product tactics.
Let’s refer again to some real-world examples to demonstrate how KPIs can help measure the impact of product tactics on the overall strategy:
It’s essential to have both a clear, concise product strategy and well-defined product tactics to achieve success with a product in the market. While product strategy is the umbrella and enabler, tactics help you derive a focused plan for implementation and execution.
Defining the strategy and tactics and regularly measuring the performance using metrics and KPIs helps you achieve product differentiation in the market and drive value to the end customer.
Featured image source: IconScout
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