Product Strategy Tools - Overview

In the next series of posts to my blog, I'm going to discuss some product strategy tools that I have used during my career. Each tool will get its own post. The tools are:

1. Porter's Five Forces
2. Boston Consulting Group (BCG) Growth-Share Matrix
3. GE/McKinsey Multifactor Portfolio Matrix
4. Ansoff's Product-Market Matrix

Rather than just give a simple - almost academic - overview of each tool, I will also describe how I have used it with an example of the output of the tool. So this is more of a practical case study of using the tools, their strengths and weaknesses, and how I found each of them to be most useful.

When most people look at the output for the various tools, they see something that is visual and easily digestible e.g. the BCG Matrix with its quadrants labeled as Stars, Cash Cows, Dogs, and "?" (i.e. uncertain). What they don't always see is all of the research and analysis that went into synthesizing the data to create the visual output. I have often found that the process of gathering and analyzing the data is as useful, if not more useful, for the product management team. I have often used tools like the GE/McKinsey matrix to make the product managers think about their products and the market that they operate in. This is an opportunity for me, as their manager, to challenge their assumptions and make them justify their figures. I have had product managers claim that their target market is worth hundreds of millions of dollars (target market size is one of the data points gathered for the GE/McKinsey matrix), yet when challenged to explain the figure, they can't. Once you get past the never-before-challenged assumptions, you can then get the product manager to build a more realistic picture of the market and their product within the market, and then - and only then - can you get them to realize their true challenges and opportunities.