Product Development Strategy

Keeping up with the ever evolving trends, businesses must have a product development strategy that is well adapted to a changing market.

Trends and customer demands are changing and so are the responses of companies to improve revenue.

Thus in each business does this in a unique way depending on the needs of their market.

If you are starting a startup these same strategies apply.

There are several things to consider and approaches a business can adopt to break into a market or to up their game in an existing one. 

All of this builds up to specific product development. While a company can have a great idea the chances of success are slim without an equally good product development checklist.

In this article, we go through what is a product development strategy and how to make a workable strategy for your business. 

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What is Product Development Strategy

Product development strategy is the process of bringing new innovation to the customer or to the market.

With change, a way to stay ahead of the competition is to constantly bring up innovative ways focusing on the needs of the customer. 

Since your product usually tells the story or portrays the values of your business, your product development strategy is often aligned to your business strategy. For some, this could involve designing or creating a new product. Check out this list of the best startup books.

While you might not always need something new, the solution could simply be refreshing a product or its method of entry into the market.

It is very common for a business to look into ways of restating their position in the market especially when there is a drop in revenue. However, it is important to keep in mind the needs of the customer.

Product Development Strategies

There are several product development process models a business could adapt to suit their business needs. These include;

Waterfall Process:

The Waterfall process involves an ordered or linear cycle or pattern for product development. This is the most common or the traditional approach to product development. There is usually a laid-out list of things to be done and each has to be done before the subsequent task could begin. 

Agile Process:

The Agile Process works as an opposite of the waterfall process. Here, teams are broken into smaller groups, and the activities are broken into chunks that require frequent inspections. Usually, each task is taken at a specific time so there is little time wasted and delay depending on the experience of each team. 

Spiral Process:

A Spiral process requires a continuous cycle of identification, design, building, and evaluation. These four stages are carried out in short intervals repeatedly, especially in software developments.

V Process:

The V-Process is a modified form of the Waterfall process where events and tasks are carried out in a linear path. The difference here is that the sequences appear in a V-shape with the inclusion of a validation phase.

Prototyping Process:

A more common approach is developing a software prototype. Prototypes are built often before resources are pumped into the actual product development. They are used to show the functionality and description of the product before its development is completed.

RAD Process:

Rapid Application Development involves prototyping in drafting the software. Just as in the agile process, tasks are broken into sprints although not much planning is required in production.

Big Bang Process:

The Big Bang process is more spontaneous than others. Here, there is no specific flow and tasks are done based on the available resources. Similarly, not often are the customer’s needs also considered in this process. You can find more on this in the podcasts for startups area.

Agile Product Development Strategies

An agile strategy requires working in shorter time spaces. This involves applying the methods or principles of the Agile Manifesto. 

Here, the whole process is broken down into short time frames or sprints along which communications and feedback are required. 

Unlike traditional methods where the task is taken as a whole, using an agile approach requires taking the task in chunks. 

Before each sprint or iteration, there is a meeting to discuss and prioritize individual tasks. This method has the big advantage that it helps hasten response time to meet market needs.

Agile Methodology Pros and Cons

Agile methodology that can be adopted include;


Kanban is a Japanese word meaning signboard and is related with just in time productions. As a visual workflow management approach, this method uses a Kanban board. 

This board is divided into two columns that show the tasks to be done and the level of performance or the flow in the software development. 

The Kanban board is updated as the development progresses to remove or include new tasks. 

The driving principles of Kanban are based on visualizing the task to be performed today, boosting workflow and tracking the quantity of the work not yet done. Hence it requires effective communication and transparency.


    • Using the Kanban Board makes it easy for every team member to see what task should be done as well as the progress of each one.
    • It supports collaborative team work for a continuous flow of work.
    • For a large project, you can limit the number of running tasks, easing up the delivery time.


    • Since there are no specific time frames, there could be delays at different stages culminating in delays at delivery.
    • Similarly, there are often several information on the Kanban Board, if not updated promptly, can be misinterpreted by team members


The most commonly adopted agile method is the Scrum. Just like in Kanban, a Scrum board is utilized and tasks are divided into sprints and allotted a development time. The difference is that here, the focus is on managing one sprint at a time. The method is characterized by its simple processes that sustains continuous productivity.

Using this process, teams can easily adjust priorities such that incomplete sprints or tasks can be promptly attended to. There are unique roles such as scrum master who organizes the team, the product owner who creates the product backlog. 

Once tasks are created by the product owner, there are daily meetings to assess progress and way forwards. This allows a way to synchronize all the tasks done by different team members. Usually, sprint backlogs are often concluded in about 2-4 weeks.


    • With a set deadline, keeping team members motivated is not too difficult.
    • The scrum method makes it easy to reorganize priorities for a faster delivery and so that uncompleted jobs could be promptly attended to.
    • The focus is on quality rather than quantity.


    • It becomes easy to lose track of the whole project since attention is paid on sprints or chunks of the real work.
    • Role definitions are not very clear here and could result in confusions.

Extreme Programming

Extreme Programming (XP) also uses sprints to divide tasks into short development cycles. The emphasis in this method is on finding and working on the simplest and effective task at hand.

Testing of the software is an important part of the XP process and this is done continually from the beginning of the project. Extreme programming pays more attention to customer satisfaction than delivery as a whole. Therefore, feedback is vital in assessing progress and output.

Communication and teamwork are also emphasized here along with simplicity. 


    • Simplicity is emphasized in the extreme programming method allowing the codes to be easily understood and improved anytime.
    • Due to continuous testing, the whole process is more agile
    • It is also possible to track the  development cycle since visible goals are created and  measured with results.


    • Monitoring errors is often not done here resulting in recurrent errors or bugs.
    • Extreme programming approach pays close attention to the codes of the software and could cause neglect of designs or other components of the software.


Crystal is a very flexible agile methodology that allows teams to develop their own processes. This approach is mainly people based rather than the processes involved. To achieve success using this method, more attention is paid to interaction between people working on projects.

Because of the changes that could occur during projects, teams are free to work out the best processes and decisions for themselves. Crystal is a much freer method to employ as it removes the necessities of overhead allowing team members to decide best.

There are several variants to suit the number of people on the teams. This includes the Crystal Clear for smaller teams of up to 8 people. Crystal Yellow for teams between 10-20 people and the Crystal Red for really large teams of way above 100. 


    • It ensures better communication between team members for a better process
    • It is open to continuous development and improvements.
    • There is space for continuous improvements on how to perfect processes during discussions


    • The need for constant communication might not be the best option for teams scattered geographically.
    • Although it works well for experienced and autonomous teams, beginners with little experience might not benefit from it.
    • The different variants depending on the team size could have different principles and complicated project results.
Dynamic Systems Development (DSD)

The Dynamic System Development Method brings a faster software delivery framework. Using this method, it is possible to plan, handle and scale software development at any level. It also incorporates prototyping, functional models and design.

Like other agile methods, this also uses sprints and works on principles that focus on the business needs while not compromising quality. This method also allows collaboration, prompt delivery through incremental building, continuous communication and control.


    • Makes it easy to work with smaller budgets hastening the time for development and progression.
    • By prioritizing business case, it ensures that projects are delivered with the business value
    • There is an easy access to the end users


    • Implementation costs for the DSDM can be costly and not affordable to small businesses.
    • There is a specific standard that must be followed limiting the creativity of the developer.
Feature-driven Development(FDD)

Feature Driven Development (FDD) is an agile method commonly used in software development. This method is most appropriate for projects that involve development of features especially when handled by a smaller team. Unlike the other agile approaches that use the iterative or the sprint approach, FDD is focused on developing small features per time. 

Here, bigger tasks are broken into manageable features which are handled within one or two time frames. First the overall model is built, then a list of the needed features made. Next, you make plans based on the needed features and ensure the designs and build follow these.

There are roles in the FDD modeling such as the project manager who oversees, chief architect, development manager, chief programmer, class owner and the domain expert. However, this method applies a user focused approach.


    • By working with the smaller features, teams are able to understand the intricacies of the project.
    • The business is able to design products better suited to users since the method is more user focused. 
    • When code features are handled, it becomes easier to track and fix codes reducing errors and risks.


    • For small teams where there are few developers, this method might not be applicable because it would require few people to take on several roles.
    • There is usually no written documentation to the client making it difficult for the client to obtain an actual proof of owning the software.

Lean Software Development Methodology

The lean idea is a bit different from the agile methods but they have similar values and principles. This methodology is a direct process from Lean manufacturing that allows teams to remove activities or processes that do not add value to the product.

The focus in this method is on reducing waste, improving quality and delivery time. It also ensures that commitment is deferred, there is enough knowledge among team members, and optimization of the process as a whole.

Similarly, customer feedback is taken seriously here as well as part of the incremental development of the product. Often, there is the creation of a minimum viable product to ensure the removal of waste and to cut delivery time.


    • There is the removal of unnecessary activities and features. This way, the organization can save money and time as well as concentrate on more important activities.
    • By focusing on only essential and important tasks and features, it is possible to hasten delivery time.
    • Methods or successes in smaller projects can be easily scaled to bigger or larger ones.


    • Major projects are divided into smaller tasks making it easier to lose focus and spend too much time on a task.
    • It requires very dedicated and experienced developers to effectively use the lean principles.

Benefits of Agile Method in Product Development

The agile methodology has become an interesting method because of the flexibility it offers business owners. However, there are several other benefits of using the agile methods in your product development strategies.

    • Improved quality: employing agile methods requires continuous product testing from the beginning for a superior product quality. This way, the client is carried along and the developer can easily track errors.
    • Improved team collaboration: Under the agile methodology, team work is emphasized. Irrespective of the method chosen, agile teams have different roles that enhance participation and teamwork. Communication amongst team members is also necessary for a seamless product development.
    • Continuous improvements: through the several testing phases and sprints, improvements can be made continuously along development. Similarly, by learning from each other, team members are able to make improvements as well.
    • Better response and delivery time: agile methods are primarily focused on shortening delivery time.  By breaking projects into sprints, each team is able to work on them for timely delivery. Similarly quicker response time is also possible by relying more on software than on documentation.
    • Better customer engagement and satisfaction: there is no point creating products no one wants. Most of the methods under agile prioritizes the customer. As such, it is possible to adjust the systems, alter the product or process at different points to suit the needs of the customer.
    • Reduces risk: action plans can be created, monitored and assessed all through the development stage. This way reworking and the stress that accompanies reworking and the risk of having errors are removed.

Factors to consider when choosing an Agile Methodology

Having gone through the various agile methods, here are some factors to help you choose the best method for your business.

  • Your team skills Questions such as what is the skill level possessed by your team members are very important in determining the best method for you. There are several agile methods you can adopt depending on the skill of your team. Some methodologies such as Extreme Programming might require high programming skills. Some methods would require better communication skills or teams with more experience or a wider domain knowledge. On the other hand, some methodologies such as DSD can be easily used by beginners and smaller teams.
  • Organizational culture Agile methods also pay attention to the way the business is organized. The hierarchy in your company would also affect the best method to apply. For example methods such as DSDM or Lean do not require a strict overhead structure unlike Scrum and FDD. 
  • Customer involvement Agile methods are often customer focused to ensure that the products made meet the needs of the customer. Notwithstanding, the extent of customer involvement would determine the exact method to apply. You would first need to answer questions on the extent of customer collaboration and commitment is required. If customer commitment is not high, using extreme programming methods might not be a good idea. Similarly how much of the domain knowledge should the customer also have is a very important point to consider as well. Would they need clarification on the functionalities or not? If they would, methods like the FDD might not be the best here.
  • Nature of the project You should also consider the size, decomposability and criticality of the project. How large is the project and can it be broken down into smaller tasks or chunks? Can the smaller segments be handled by different teams at the same time?For example, you would want to use FDD for critical projects. Also, you would find Scrum perfect for projects that can be handled by small or medium sized teams.
  • Project details Details around your project such as the expected delivery date, time, scope and quality would also influence the approach you would consider. Similarly, if the budget for the project is not large, consider using a method with a lesser cost. 


Product development involves incorporating innovations to help meet customer needs and has proven to be a sure way to beat the competition. There are several strategies and methodologies that can be adopted, one of which is the Agile method.

By focusing on prompt delivery, heightened customer satisfaction and continuous improvements, many organizations have broken even using the agile methods. 

Notwithstanding, there are different approaches that can be adopted based on the need, the organization and the customer. The agile method has profound benefits for businesses when the right approach is applied.


How is agile used in product development?

In product development processes, the Agile method allows large projects to be broken down into sizable tasks to be handled by different teams. Benefits of this is faster product delivery time while ensuring the needs of the customers are met.

What is the difference between waterfall and agile?

The difference between the waterfall and the agile approach is that in the former, there is a sequential order in which tasks follow. Often the subsequent task cannot be done without the completion of the previous one. In the agile approach however, the whole project is broken into iterations that can be handled by different teams at the same time.

What is the difference between Scrum and Kanban?

While both borrow from lean and agile approaches, Scrum has set roles while Kanban does not. They both use work boards but the Scrum board has columns that assign times to the task. Kanban on the other hand shows tasks based on what is to be done, what is ongoing and what has been done.

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Product Development Strategy (Everything You Need To Know)

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