#20 - Mandatory Requirement: Business strategy must be finalized before product development

Mandatory Requirement: 

Business strategy must be finalized before product development

A clearly defined business strategy must be established alongside product development. This is not about creating a new business vertical. For most Public Sector Undertakings (PSUs), the core business remains standard, and new products are developed within the framework of that existing business.

Many organizations successfully develop technically sound products; however, a critical question is often overlooked during or even before the development stage: What is the business model for this product?

As a result, once the product is developed, organizations face recurring challenges such as aggressive competitor pricing, raw material cost volatility, and ineffective marketing strategies.

Therefore, whenever an organization plans to develop a new product, the associated business plan and strategy must be finalized in advance. Only after the business model is validated and found viable should the product development process proceed.

An organization may have highly competent technical teams capable of developing excellent products, but if those products cannot be effectively marketed, their technical excellence alone provides no commercial value.

Typically, new projects are accompanied by a marketing plan. However, in many PSUs, new product development is often driven by the existence of similar products in the market that appear profitable. This approach frequently results in a “copycat” product—technically acceptable, but commercially unviable due to higher costs compared to established market alternatives. Predictably, such products fail to generate sales.

Before initiating product development, a comprehensive study must be conducted covering product pricing, marketing strategy, supplier credit terms, cash collection mechanisms, standard industry marketing practices, transportation logistics, packaging requirements, and other relevant operational details. All findings should be formally documented and subjected to a detailed review. Only if the proposal is deemed commercially acceptable should the organization proceed with the product development plan.

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