Strategic Product Management: Sunset Decisions, Platform Benefits, and Team Structures

Introduction

Strategic decisions around product lifecycle management, platform integration, and team structures are critical for product managers in established tech companies. Managing a product portfolio often includes determining when to sunset underperforming products, how to leverage platform strategies, and effectively distinguishing between product and project teams. These decisions, while challenging, help align product offerings with market needs, company goals, and efficient resource allocation.

In this article, we’ll explore the essential considerations for discontinuing products, the value of platform strategies, and the roles of different team structures in driving product success.

Discontinuing a Product: A Strategic Approach for Product Managers

Discontinuing a product is a complex decision that impacts customers, revenue, and company reputation. However, strategic discontinuation can free up resources for innovation, align the product portfolio with market needs, and strengthen overall business focus. Here’s a structured approach to evaluating whether a product is ready for discontinuation:

Re-Evaluate the Business Case
- Start by assessing the product’s current market relevance, revenue contributions, and alignment with the company’s vision. A thorough review can reveal if the product still meets the intended purpose or if market shifts have decreased its relevance.
Analyze Key Performance Metrics
- Examine financial and customer satisfaction metrics like average sales, costs, profit margins, and Net Promoter Scores (NPS). Declining trends in these areas can indicate that the product may no longer meet customer needs or deliver sufficient business value.
Consider the Product Lifecycle Stage
- Products in the late maturity or decline phase may be prime candidates for discontinuation. By understanding the product’s lifecycle stage, you can better anticipate when it may be time to allocate resources elsewhere.
Evaluate Strategic Fit
- Assess whether the product still aligns with the company’s portfolio and strategic direction. Products that no longer fit into the company’s broader vision or value proposition may be better candidates for sunsetting.
Plan for Replacement or Transition
- Before discontinuing a product, consider whether its functionality or revenue stream needs replacement. This could involve developing new offerings or enhancing existing products to meet customer needs.
Develop a Communication Plan
- Clearly communicate the decision to customers, partners, and internal stakeholders. Offering ample notice, transition support, and migration options can help maintain customer loyalty and smooth the transition process.
Execute a Managed Wind-Down
- Implement a phased plan for discontinuing sales, production, and support. Incentives for customers to migrate to newer products can help retain their business.
Learn from the Process
- Use the discontinuation process to gather insights that can inform future product development and portfolio management strategies. Regular reviews can ensure that the product portfolio remains aligned with evolving market conditions and business objectives.

By taking a systematic approach to product discontinuation, product managers can optimize their portfolios, maintain market relevance, and better allocate resources to high-impact initiatives.

Leveraging Platform Strategies in Product Portfolio Management

A platform strategy can be transformative for product portfolios, especially in mid-to-large tech companies looking to streamline operations and boost scalability. By creating a shared foundation for multiple products, platform strategies enhance efficiency, foster innovation, and reduce costs.

Benefits of a Platform Strategy:

Scalability and Faster Growth
- Platform business models scale rapidly by reusing shared components across products, allowing companies to expand faster without the need for resource-heavy development from scratch.
Cost Savings through Component Reuse
- Platforms reduce development costs by allowing teams to reuse components, leading to economies of scale in both production and manufacturing.
Accelerated Time to Market
- By using common platforms, companies can launch products more quickly, which is especially valuable in competitive markets that reward innovation.
Improved Efficiency and Simplified Manufacturing
- Platforms create centralized tools and processes, which reduce redundancies, simplify workflows, and streamline manufacturing across product lines.
Enhanced Innovation
- Platforms make it easier to incorporate new technologies across product lines, allowing product managers to quickly bring innovations to market without needing extensive rework for each product.
Risk Mitigation
- Using a standardized platform reduces development risks by ensuring that each new product benefits from previously tested components and processes.
Improved Financial Performance and Brand Engagement
- Companies with mature platform strategies tend to experience better financial outcomes, with higher returns to shareholders and operating margins. Moreover, platform strategies have been linked to increased brand awareness and customer engagement.
Flexibility for Customization
- Platforms allow for customization to meet different market needs. This flexibility enables companies to tailor products for different customer segments without the need for entirely new development.

Considerations for Implementing a Platform Strategy:
While platform strategies offer significant benefits, they also require upfront investment and a clear roadmap. Product managers should ensure alignment with long-term company goals, assess available resources, and consider the platform’s scalability as market needs evolve.

Distinguishing Product Teams from Project Teams

For product managers in larger tech companies, understanding the differences between product and project teams can enhance team alignment, resource allocation, and product success. Each team type serves a unique purpose and follows a distinct approach.

1. Structure and Duration

Product Teams: Long-lived and cross-functional, product teams often exist for the lifecycle of the product, lasting from initial concept through to discontinuation. They include members from engineering, design, marketing, and support, all working collaboratively to achieve the product’s strategic goals.
Project Teams: Temporary and purpose-driven, project teams form around specific initiatives and disband upon completion. Members are often drawn from various functional departments and reassigned after project closure.

2. Focus and Goals

Product Teams: Product teams are responsible for the overall success and long-term strategy of the product. They focus on maximizing customer value, driving profitability, and aligning with the company’s business goals.
Project Teams: Project teams concentrate on delivering specific outcomes within defined constraints (scope, budget, and time). Their success is measured by completing tasks that achieve a particular goal, with a focus on the project’s immediate deliverables.

3. Approach to Work

Product Teams: Flexible and iterative, product teams continuously evolve the product based on customer feedback and market demand. They can pivot direction as needed and are empowered to make strategic decisions about the product’s direction.
Project Teams: Project teams follow a more structured plan, typically working within a fixed roadmap. They are often less empowered in strategic decision-making, focusing instead on executing stakeholder-defined solutions.

4. Funding and Metrics

Product Teams: These teams are funded on an ongoing basis, with periodic strategy reviews to ensure alignment with business objectives. Success metrics include product performance, customer adoption, and business impact.
Project Teams: Project teams receive funding based on the project’s scope and deliverables, with success measured by completing the project on time, within budget, and meeting the initial requirements.

Understanding these differences allows product managers to effectively leverage both team structures, aligning them with company goals to achieve ongoing product success and project completion.

Conclusion

For product managers in mid-to-large tech companies, strategic product management encompasses not only the development of new products but also the thoughtful discontinuation of those that no longer align with business goals. Leveraging platform strategies, managing team structures effectively, and making data-informed decisions about product lifecycles are essential for maximizing portfolio success.

Whether you’re planning a product sunset, implementing a platform approach, or balancing project and product team dynamics, these strategies will support more efficient resource use, stronger market positioning, and sustained growth.

Strategic Product Management: Sunset Decisions, Platform Benefits, and Team Structures