By Ed Crowley, Photizo Group
Is your product strategy sustainable? Will it propel your organization to success by providing 'winning' new products? Or will it simply generate a continuous series of "me too" products with minimal competitive differentiation and customer appeal? For companies in the imaging space (copiers, printers, supplies, etc.), product strategy is one of the most challenging management tasks. And perhaps the fundamental driver of product strategy is the rapid pace of change in the industry.
Perhaps the fundamental driver of product strategy is the rapid pace of change in the industry.
I remember speaking at a conference where I mentioned the average development cycle for a product in the 'printer' space was 18 to 24 months with an average 'market life' of 18 to 24 months. The audience consisted of product development executives from companies as diverse as consumer products to industrial machinery. All of the audience was surprised by this statement. In many industries development cycles may be as long as two or three years, but, product life cycles are more typically three to five years. The executives in the audience were stunned by the rapid pace of change in the imaging industry. However, for those of us in the industry, this has become the 'norm'.
Making the strategy development equation even more complex – the competitive intensity of the imaging industry is constantly increasing. As many operating incomes shrink, companies are increasingly looking for 'green fields' of incremental growth. The only problem is that one firm's growth area, is another firm's 'home turf'. For example, companies which have historically been strong in the distributed printing hardware space (i.e. HP and Lexmark) are increasingly looking to the traditional strength of the "copier firms" (Canon, Konica Minolta, Ricoh, and Xerox), managed service agreements --agreements where the vendor manages the hardcopy assets for a set fee or 'click charge'. Of course, these firms are fighting desperately to hold onto this market which has traditionally been dominated by their resellers.
As firms attempt to grow their revenue base by capturing new market segments, they must simultaneously defend their core market segments from encroachment by these very same competitors who are trying to gain share in their space.
A Two-way Street
This same battle is repeating itself in other market segments. Copier companies are increasingly going after the distributed printer fleets with an MFP consolidation strategy. Printer and copier companies are targeting the page rich production printing and digital press space which has traditionally been dominated by a few firms such as IBM Print Systems, Kodak, Océ and Xerox. As firms attempt to grow their revenue base by capturing new market segments, they must simultaneously defend their core market segments from encroachment by these very same competitors who are trying to gain share in their space.
So in this rapidly changing and highly competitive environment, how does one craft a true product strategy? A series of four articles over the next month or two, will break this down into several key steps:
- The 7 deadly sins of product strategy. Before talking about the best way to craft a strategy, let's define what you do not want to do!
- The Survey – Understanding the Terrain and Building A Floor Plan. A key to developing a winning product strategy is to have a complete understanding of the market – market 'intelligence'. This intelligence is critical to identifying what your 'room to maneuver' is, how you should define your market, your target customers, and your competitive set. Market roadmaps are a critical component to defining a winning strategy (in this article I will provide examples of Product Roadmaps).
- Building the Strategy – Laying the Foundation. Now that you understand the terrain and have a floor plan – the real heavy lifting comes in. You must define where you are going to compete and how, and perhaps just as importantly where you are not going to compete. This is where you actually define strategically (not tactically) how you are going to compete in terms of products.
- Building the Walls - The Product Plan – Finally, we get to that point where most companies start – the product plan. If you base your plan on a well-defined strategy, then you will ultimately deliver successful products which are differentiated.
These articles will focus on both the product side of equipment vendors and how print providers should be thinking about their products in an increasingly commoditized market.