WHAT IMPORTANT PROBLEM DOES YOUR PRODUCT STRATEGY SOLVE?
Every healthy manufacturer has a healthy product strategy. Even contract manufacturers, who simply subcontract to other companies and have no products of their own, must have a healthy product strategy.
Yes, companies can exist profitably for a while focused on product or capability, but they can't last long. Too much changes all too quickly.
Consider for a moment how additive manufacturing is impacting the spare parts and contract manufacturing supply chains. We can now design and build products around the world that couldn't be manufactured last year. And that can easily be done to order, relegating large-lot-size inefficiencies to history.
The fundamental question for all manufacturers is "what problem(s) of importance are you solving effectively for your market?" Any change in the existence or importance of that problem, or solution alternatives, can destroy a business if it's focused on products or capabilities rather than problems the market cares about.
In Cleveland Ohio we get snow every winter. Much of the world can say the same thing. The millions of people who like to bicycle to work struggle to do so on snow-piled streets.
Should bike manufacturers look at themselves as reliable transportation companies and focus on solutions to that challenge? Or should they remain focused on the hobby aspects of biking and ignore the reliable transportation view? Or should they focus on the exercise motivation and consider Peloton a serious market threat?
The product strategy of a bike manufacturer must reflect the problem(s) their market(s) prioritize. As more people move to urban areas, the reliable transportation problem gains traction (pun intended). Does the company focused on the "Saturday afternoon rides through the park" market remain viable when that market now also wants to ride to work, through rain, snow, sleet, or ice?
A successful business always focuses on the problems its products solve, not on the products it currently offers. We all know the Kodak story, how the iPod impacted sound systems, how Sirius XM impacted local radio stations and how the internet impacted print news.
What business are you really in? Does your product strategy reflect that? Manufacturers committed to long term success, including contract, cannot be product-based businesses; only solution-focused businesses thrive over time.
What is the most important problem your manufacturing business solves?
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