外文文献Business Strategy vs. Product StrategyApril 10, 2009Marty CaganIn keeping with my recent theme of product planning, Id like to focus in this article on an important distinction and source of frustration in many companies, and that has to do with the differences between business strategy and product strategy.Many companies confuse or blur the two, and the result is easy to spot. The senior executives want to focus on the business strategy, but they find they are forced to make decisions at a level far below where theyre comfortable or usually even interested, such as which specific products, projects and even features to invest in, and what the interdependencies are between these features and projects, and often what is on the actual page and how to resolve conflicts.And on the other side, the product managers feel like they dont understand the reasons behind decisions that directly impact their products, they feel like the strategy is guard-railing every few months, and they dont feel empowered to do their jobs.Very often Ill attend a product planning session with senior executives and theyre being presented with lots of detailed product plans but without the business context. When I ask where the business strategy is, Ill often get a blank look. The team wants to make more money so these are the features they want to add, or so their reasoning goes.Business strategy is about identifying your business objectives and deciding where to invest to best achieve those objectives. For example, moving from a direct sales model (your own sales force selling directly to customers) to an online sales model (your customers buy from your site) is a business strategy. Deciding whether to charge for your services with subscriptions or transactions fees or whether you have an advertising-based revenue model is a business strategy. Deciding to move into an adjacent market is a business strategy.Now, clearly there are some big product implications to each of these business strategies. But they are not one in the same. There are lots of ways to sell online, lots of ways to monetize value, and lots of ways to develop or acquire and integrate an adjacent offering. The product strategy speaks to how you hope to deliver on the business strategy.Moreover, while the business may believe something is a great business opportunity, you dont yet know if your company can successfully deliver on this opportunity. Maybe it will cost too much to build. Maybe customers wont value it enough to pay for it. Maybe itll be too complicated for users to deal with. This is where product strategy and especially product discovery come into play.The business maintains a portfolio of investments, and the business can and should adjust that portfolio mix as businesses and markets develop.Take as an example Amazon. Theyve got a portfolio of investments including their core e-commerce offerings by category, theyve got third-party selling, theyve got an infrastructure technology (cloud computing) business, and theyve even got their own growing consumer electronics business. I especially like Amazon as an example because they illustrate so many points of good business strategies (and good product strategies).Amazon may have made their business in selling hardcopy books and theyve been a great innovator there, but instead of spending all their time trying to protect that business, theyve also got an investment that could one day revolutionize that entire business. To Amazons credit, they realize that if they dont pursue this someone else probably will. Similarly, they have worked hard to create innovative technologies to allow them to provide a differentiated e-commerce customer experience, yet they also have been leaders in making that technology available to others (Amazon Web Services) because its possible that cloud computing business will one day be even larger than what they can ever do themselves as an online retailer.Thats a business strategy and you can see their portfolio planning. Now each of these businesses has one or more product strategies. As an Amazon user you can see the evolution of the e-commerce retailing business. You can also see the evolution of the Amazon Web Services product line; every few months another piece of the puzzle is launched. You can see the evolution of the electronic reader and the supporting technologies.Think of it this way. The business strategy and business portfolio planning provides a budget and a set of business metrics. The product organization then lives within that budget to pursue as aggressively as possible the best ways to hit those business metrics.Some product strategies will prove more successful than others, and this will impact the business portfolio planning. And not every business of course will resonate with customers, so a big part of business strategy is knowing when to continue to invest and knowing when to cut your losses so that you can i