A product development strategy provides the framework to orient a company's development projects as well as its development process. There is no one right strategy for a company. The strategy takes into account the company's capabilities (strengths, weaknesses and core competencies), the competition's capabilities (strengths, weaknesses, core competencies and strategy), market needs and opportunities, goals, and financial resources.

As a starting point to develop a product development strategy, the company must determine its primary strategic orientation. A company must recognize that it cannot be all things to all people and that it must focus on what will distinguish it in the market place.