Developing market-driven product strategies David W. Cravens Eunice and James L. West Chair of American Enterprise Studies, Texas Christian University, Fort Worth, Texas, USA Nigel F. Piercy Sir Julian Hodge Chair in Marketing and Strategy, Cardiff University, Cardiff, UK Ashley Prentice Staff Consultant, Ernst & Young LLP, Houston, Texas, USA Keywords Product strategy, Product management, Market orientation, Brands Abstract Successful companies encounter unique competitive challenges. However, there are several product strategy initiatives that are relevant to all organizations seeking to develop market-driven strategies. Key initiatives include the leveraging the business design, recognizing the growth mandate, developing market vision, achieving a capabilities/value match, exploring strategic relationships, building strong brands, brand leveraging, and recognizing the advantages of proactive cannibalization. We propose a product strategy agenda for review by executives in identifying which initiatives should be assessed relative to the needs of their organization. Notwithstanding the topical importance of relationship marketing processes, customer satisfaction management and supply chain collaborations to control logistics, it is apparent that many companies build strategies around pivotal products. Companies such as Coca-Cola and Intel formulate their strategies around key products in their portfolio. Recently, several important trends have emerged in the marketplace such as the blurring of market boundaries, escalating customer diversity, and increasing global competitive threats. These trends create an impetus for executives to develop and adopt market- driven product strategies, which are integrated with relationship and supply chain strategies, to deliver superior customer value. Dell Computer's direct to the customer, build-to-order business design demonstrates the positive impact of product strategy on corporate performance. This successful strategy highlights the critical need to identify and examine the strategic initiatives that may impact product strategies. Dell pursues a growth strategy by offering customers next generation products faster than the competition. The company's growth since its launch in 1984 has been impressive. 1999 sales were over $25 billion. Management understands computer buyers through Dell's very effective market-sensing processes. Strategic relationships with suppliers and customers offer flexibility in responding to competitive pressures and leveraging partners' distinctive capabilities. Dell positions these capabilities to meet customers' value requirements. The power of the Dell business model was underlined early in 1999, when IBM agreed to a $15 billion technology collaboration rather than to continue to compete head-on with Dell. Building strong brand equity and facilitating strategic brand management are important corporate priorities. Although successful companies face unique competitive challenges, there are several important strategic dimensions that all executives need to assess The current issue and full text archive of this journal is available at http://www.emerald-library.com Strategies built around pivotal products JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 9 NO. 6 2000, pp. 369-388, # MCB UNIVERSITY PRESS, 1061-0421 369 An executive summary for managers and executive readers can be found at the end of this article