Developing market‐driven product strategies
| Date | 01 November 2000 |
| Published date | 01 November 2000 |
| DOI | https://doi.org/10.1108/10610420010356975 |
| Pages | 369-388 |
| Author | David W. Cravens,Nigel F. Piercy,Ashley Prentice |
| Subject Matter | Marketing |
Developing market-driven
product strategies
David W. Cravens
Eunice and James L. West Chair of American Enterprise Studies,
Texas Christian University, Fort Worth, Texas, USA
Nigel F. Piercy
Sir Julian Hodge Chair in Marketing and Strategy, Cardiff University,
Cardiff, UK
Ashley Prentice
Staff Consultant, Ernst & Young LLP, Houston, Texas, USA
Keywords Product strategy, Product management, Market orientation, Brands
Abstract Successful companies encounter unique competitive challenges. However, there
are several product strategy initiatives that are relevant to all organizations seeking to
develop market-driven strategies. Key initiatives include the leveraging the business
design, recognizing the growth mandate, developing market vision, achieving a
capabilities/value match, exploring strategic relationships, building strong brands, brand
leveraging, and recognizing the advantages of proactive cannibalization. We propose a
product strategy agenda for review by executives in identifying which initiatives should
be assessed relative to the needs of their organization.
Notwithstanding the topical importance of relationship marketing processes,
customer satisfaction management and supply chain collaborations to control
logistics, it is apparent that many companies build strategies around pivotal
products. Companies such as Coca-Cola and Intel formulate their strategies
around key products in their portfolio. Recently, several important trends
have emerged in the marketplace such as the blurring of market boundaries,
escalating customer diversity, and increasing global competitive threats.
These trends create an impetus for executives to develop and adopt market-
driven product strategies, which are integrated with relationship and supply
chain strategies, to deliver superior customer value.
Dell Computer's direct to the customer, build-to-order business design
demonstrates the positive impact of product strategy on corporate
performance. This successful strategy highlights the critical need to identify
and examine the strategic initiatives that may impact product strategies. Dell
pursues a growth strategy by offering customers next generation products
faster than the competition. The company's growth since its launch in 1984
has been impressive. 1999 sales were over $25 billion. Management
understands computer buyers through Dell's very effective market-sensing
processes. Strategic relationships with suppliers and customers offer flexibility
in responding to competitive pressures and leveraging partners' distinctive
capabilities. Dell positions these capabilities to meet customers' value
requirements. The power of the Dell business model was underlined early in
1999, when IBM agreed to a $15 billion technology collaboration rather than
to continue to compete head-on with Dell. Building strong brand equity and
facilitating strategic brand management are important corporate priorities.
Although successful companies face unique competitive challenges, there
are several important strategic dimensions that all executives need to assess
The current issue and full text archive of this journal is available at
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Strategies built around
pivotal products
JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 9 NO. 6 2000, pp. 369-388, #MCB UNIVERSITY PRESS, 1061-0421 369
An executive summary for
managers and executive
readers can be found at the
end of this article
in developing and managing effective market-driven product strategies. Our
objective is to develop an action agenda consisting of the eight strategic
dimensions shown in Figure 1. Executives can use this template to examine
their organizations' product strategies critically. All of the dimensions may
not apply to every organization, yet many are applicable to a wide range of
industries and individual companies. We examine each dimension indicating
the relevant strategic issues and offer several examples of the positive and
negative impacts of the eight influences on product strategy.
The intent is not to provide a comprehensive analysis of each strategic
dimension. Instead, we propose an agenda for review by executives, which
enables them to focus on the dimensions that should be assessed in more
detail relative to the needs of their firm. These product strategy dimensions
have proven to be critical in a broad cross-section of competitive situations.
The business design, the roadmap for an organization, is the starting point in
examining seven other key dimensions of product strategy (Figure 1).
Technology versus business design
Mounting evidence from business practice points to the pivotal role of a
robust business design in gaining and sustaining a competitive edge (Porter,
1996; Slywotzky, 1996; Day, 1994). Xerox's management recognized the
mandate to incorporate digital technology into its copying processes, but the
company's business design was essential in achieving the transition to the
digital era. Organizations' processes for finding, developing, and
commercializing new products are necessary in applying technologies
needed to exploit market opportunities.
Leveraging the business design to innovate
The business design consists of the organization's customer focus, value
proposition and processes that deliver superior customer value and generate
profits (Slywotzky, 1996, p. 4). Products and technology are integrated into
the design through the network of activities and relationships that comprise
the organization. Dell Computer offers new products and employs advanced
technology, but the direct, build-to-order business design is the fundamental
driver of the company's innovation process. Amazon.com's spectacular and
innovative use of Internet-based selling of books, music and video products
is underlined by a novel business design that exploits technology to build
communities of customers to which wide ranges of products can be sold.
Imbedded in the business designs of successful firms are effective new
product development processes. Hewlett-Packard's process for developing
Figure 1. Market-driven product strategy
Agenda for review
Business design
370 JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 9 NO. 6 2000
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