“The essence of strategy is choosing what not to do” – Michael Porter
Proctor & Gamble is one of the few unique companies in the world that has a shining portfolio of billion dollar businesses. Playing To Win: How Strategy Really Works divulges the strategy and methods of top consumer brands such as Olay, Bounty, Swiffer, Febreze, Pampers, Gain, Gillette and more! This book is a consortium of simulations on how competing products battled it out for supremacy in the marketplace in various industries. Every entrepreneur and aspiring CEO should read this book to develop a rockstar strategy to stand out from mediocrity.
A strategy is a coordinated and integrated set of five choices that uniquely meet a consumer’s needs, thereby creating competitive advantage and superior value for a business.
The Five Strategy Choices:
- A Winning Aspiration
- Where To Play
- How To Win
- Core Capabilities
- Management Systems
The core of these choices are Where To Play and How To Win. These two decisions are the basis of the trunk that make up the tree of your strategy. The company needs where and how choices in order to act. Without them, it can’t win. Without them, you are simply following the status quo. Remember: No How To Win choice is perfect or even appropriate for all Where To Play choices.
A Winning Aspiration
An aspiration shared with employees is not enough. You must have an aspiration to win and a definition of what winning looks like. In order to reach the end goal, one must know what the end goal is. Strategy is deciding on a way to win and in order to win you must have a clear picture of what the final result should be.
Where To Play
It makes sense to choose Where To Play channels that match your business systems to maximize your value output and reach your target demographic. Where To Play is generally presented within these choices:
- Product Type
- Consumer Segment
- Distribution Channel
- Vertical stage of production
How To Win
How To Win is tailored to the needs, wants and personality of the customer. All successful How To Win strategies take one of two approaches, cost leadership or differentiation. Both cost leadership and differentiation require the pursuit of distinctiveness. Formulating a better value equation for consumers in either of these areas is a great way to create a competitive advantage.
Where To Play and How To Win choices should flow from and reinforce one another.
Playing to your strengths is using the competitive advantage implicitly built into the brand and its systems. For example, the acquisition of Gillette (probably the best case study in the book) meant that Proctor & Gamble could compete effectively not only in the men’s grooming category, but also create a distinct reinforced stronghold in the health & beauty market. The acquisition allowed P&G to foster an inflow of talent, ideas and brands. In return they reengineered those capabilities and activity systems to create a more efficient and effective multilevel strategy. Proctor & Gamble leveraged their own advantages – namely scale, pricing power, branding and existing relationships with suppliers – to bring even more value to the Gillette brand.
Once the strategy is defined the challenge is to find a simple, clear and compelling way to communicate the strategy to the team. Management should understand the core principles of Where To Play and How To Win decisions. A team that works together to accomplish one goal can achieve massive results. It is essential to work collaboratively on strategy because all companies are social entities and are serving the needs of a diverse population. Incorporating a culture of strategy helps to ensure that ideas aren’t ignored or ridiculed.
Explicitly, it is better to think broadly and clearly so that the entire organization will know and understand.
Thinking Through Strategy
There are four critical dimensions of strategy choice: Industry, Customers, Relative Position and Competition. The strategy logic flow below simplifies strategy decision making and requires patience, imagination and teamwork.
Devising a strategy for your business is a complicated task and success is based on forces that may or may not act in the same direction. These five forces include: Bargaining power of suppliers, Bargaining power of buyers, Threat of substitute products or services, Threat of new entrants and Rivalry among existing competitors.
Inversion, like in algebra, is oftentimes the key to solving a problem. Instead of asking people what they think is true about various options, ask them, “what would have to be true?” This encourages collaboration rather conflict and allows a team to work backwards from a solution.
The 7 Steps For Successful Reverse Engineering
- Frame The Choice
- Generate Strategic Possibilities
- Specify Conditions
- Identify Barriers To Choice
- Design Valid Tests
- Conduct Tests
Playing to Win: How Strategy Really Works
Tag: Recommended Books
Publisher: Harvard Business Review Press
Publication Year: 2013
Are you just playingor playing to win?Strategy is not complex. But it is hard. It’s hard because it forces people and organizations to make specific choices about their futuresomething that doesn’t happen in most companies.Now two of today’s best-known business thinkers get to the heart of...
Strategy is not complex. But it is hard. It’s hard because it forces people and organizations to make specific choices about their futuresomething that doesn’t happen in most companies.
Now two of today’s best-known business thinkers get to the heart of strategyexplaining what it’s for, how to think about it, why you need it, and how to get it done. And they use one of the most successful corporate turnarounds of the past century, which they achieved together, to prove their point.
A.G. Lafley, former CEO of Procter & Gamble, in close partnership with strategic adviser Roger Martin, doubled P&G’s sales, quadrupled its profits, and increased its market value by more than $100 billion in just ten years. Now, drawn from their years of experience at P&G and the Rotman School of Management, where Martin is dean, this book shows how leaders in organizations of all sizes can guide everyday actions with larger strategic goals built around the clear, essential elements that determine business successwhere to play and how to win.
The result is a playbook for winning. Lafley and Martin have created a set of five essential strategic choices that, when addressed in an integrated way, will move you ahead of your competitors. They are:
What is our winning aspiration?
Where will we play?
How will we win?
What capabilities must we have in place to win?
What management systems are required to support our choices?
The stories of how P&G repeatedly won by applying this method to iconic brands such as Olay, Bounty, Gillette, Swiffer, and Febreze clearly illustrate how deciding on a strategic approachand then making the right choices to support itmakes the difference between just playing the game and actually winning.
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Playing To Win: How Strategy Really Works is one of the best books on strategy I have read in recent times. The principles are simple to follow and the strategy of maximizing your ‘where to play’ and ‘how to win’ choices is borderline genius, yet stupidly simple. The chapter on reverse engineering strategy is an awesome exercise. A must read.