Sean Horgan

Practice of Product

On Strategy

Sean Horgan

Status: Drafting

General Principles

There is no shortage of strategy frameworks so I focused on identifying those I have found to be the most useful to Product Managers. I’m going to keep building and refining this list so it goes beyond a simple index into ways to incorporate them into your practice.

Market-oriented moves

Create a new market with a new product

Enter an existing market

Enter an adjacent market with an existing product

Expand position in an existing market

Exit a market

Bootstrapping strategy

If you are stepping into a new organization in a senior product role, e.g. CPO, VP Product, you’ll likely inherit product, people, and process that need real work. You’ll be expected to start contributing immediately and all eyes will be on you from day 1.

Situation: get clarity on the company

Funding

Org

Centers of power & influence

Sales led

Eng led

Product led

Services led

Investor led

Product

Product-Market Fit

Inbound bugs & feature requests

Tech debt

Existing product committments: internal, external

Culture

Snap strategy

Goal is to put something on paper ASAP that people can start to react to. It’s important to identify the sacred cows and hot spots.

You want to make it clear that you are going to hit the ground running while also putting in place a system for gathering information and making decisions.

What are the top 3 things the product org needs to deliver in the next 3 months.

With the exception of any red flags, you shouldn’t focus on these addressing the issues listed below but you should call them out for others to react to

Major org changes

Boil the ocean strategy

Durable strategy

Establish the key strategic pillars

Assess the market & customers

Assess the org

Assess the culture

Assess the process

How are decisions made

General Purpose Theories & Frameworks

Aggregation Theory

Ben Thompson’s

Aggregation Theory⁠

Good Strategy / Bad Strategy - Rumelt

I believe Rumelt’s Good Strategy/Bad Strategy provides a useful and accessible framework for crafting strategy. Here’s his book, it’s worth reading:

Good Strategy Bad Strategy: The Difference and Why It Matters⁠

- Richard Rumelt

The kernel of strategy:

Diagnosis of the challenge

Guiding Policy to overcome the challenges in the diagnosis

7 sources of power: leverage, proximate objectives, chain-link systems, design, focus, growth, advantage, dynamics, and inertia/entropy. Subset of note:

leverage

proximate objectives

chain-link systems - Can we focus on a weak link in the system?

Coherent Actions to implement the policy

References

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A summary of “Good Strategy / Bad Strategy” by Richard P. Rumelt — Part 1⁠

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Notes from “Good Strategy / Bad Strategy” by Jeff Zych⁠

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1. Market Analysis

Competitive Forces

Porter’s 5 forces from his 1979 paper:

How Competitive Forces Shape Strategy⁠

and

On Competition, Updated and Expanded Edition ^ 2696⁠

Here’s a nice visual from

Porter's Five Forces EXPLAINED with EXAMPLES | B2U⁠

⁠

Summary of Porter’s 5 forces:

Competitive Rivalry: This force analyzes the intensity of competition among existing firms in the industry. Intense competition can lead to price wars, advertising battles, and other costly tactics that can reduce industry profitability.

Who are the major competitors?

What is the intensity of price wars, product innovation, or marketing battles?

Is the industry growing or stagnant?

Are there signs of consolidations, M&As, breakups?

Are there high fixed costs leading to competitive pressures?

Threat of New Entrants: This force assesses the ease with which new competitors can enter the market. If it's easy for new entrants to enter, the competitive intensity will increase.

Barriers to entry: economies of scale, capital requirements, brand loyalty, regulatory hurdles.

Reaction of incumbents: Are they likely to retaliate aggressively?

How technology or trends lower barriers over time.

Bargaining Power of Buyers: This force examines the power that customers have over the industry. If buyers have strong bargaining power, they can demand lower prices or better quality, which can reduce industry profitability.

How concentrated is the buyer base?

Can buyers easily switch to competitors or substitutes?

How price-sensitive are buyers?

Do buyers have strong negotiating leverage?

Bargaining Power of Suppliers: This force evaluates the power that suppliers have over the industry. If suppliers have strong bargaining power, they can demand higher prices or better terms, which can reduce industry profitability.

Number of suppliers relative to demand.

Switching costs for firms to move to alternative suppliers.

The uniqueness or criticality of supplier offerings.

Integration threats: Can suppliers forward-integrate into your industry?

Threat of Substitute Products or Services: This force assesses the threat of alternative products or services that can satisfy customer needs. If there are strong substitutes available, it can reduce the demand for the industry's products or services.

Availability of substitutes and their attractiveness (price, quality, ease of use).

Switching costs for buyers to move to substitutes.

Trends that might increase substitute adoption (e.g., sustainability, technology).

Barriers to Entry

Porter’s 6 major sources of entry barriers: economies of scale, product differentiation, capital requirements, cost disadvantages, access to distribution channels, government policy.

Gateways to Entry⁠

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Understands major barriers to entry: switching costs, regulatory.

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https://en.wikipedia.org/wiki/Barriers_to_entry⁠

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Network effects

Same side & cross-side, multi-sided networks

⁠

https://www.sciencedirect.com/science/article/pii/S2666954422000242#bb0130⁠

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https://en.wikipedia.org/wiki/Two-sided_market⁠

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Building a Business from Data Is Hard—Here’s How the Winners Do It⁠

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Powers

⁠

Helmer’s 7 Powers⁠

: Scale economics, network economics, counter-positioning, switching costs, branding, cornered resource, process power

Understanding the environment

⁠

VUCA⁠

and

Cynefin⁠

are a couple of frameworks used to understand complex environments. VUCA is an acronym based on the leadership theories of

Warren Bennis⁠

and

Burt Nanus⁠

, to describe or to reflect on the volatility, uncertainty, complexity and ambiguity of general conditions and situations. VUCA emerged from the Army War College in 1987 as the Cold War was coming to an end and took off in management consultant circles.

From:

https://hbr.org/2014/01/what-vuca-really-means-for-you⁠

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