By A.G. Lafley, Roger L. Martin
A practical framework for winning strategy
Subject
Themes
Strategy is an integrated set of choices that uniquely positions an organisation to create sustainable advantage and superior value. At its core, strategy is choice, and winning must sit at the heart of every strategic decision. Too many organisations confuse strategy with vision statements, plans, reactive responses, optimisation, or mimicry of best practices. None of these constitutes genuine strategy because none involves making the hard, explicit choices that winning demands.
Strategy is an integrated set of choices that uniquely positions an organisation to create sustainable advantage and superior value. At its core, strategy is choice, and winning must sit at the heart of every strategic decision. Too many organisations confuse strategy with vision statements, plans,…
Playing to Win arrived during a period of intense debate about the nature and value of strategic planning. In the years following the 2008 financial crisis, many business leaders questioned whether deliberate strategy-making was even possible in a volatile global economy. The lean start-up movement,…
Strategy is not a vision statement, a plan, or a set of best practices. It is a coordinated and integrated set of five choices that uniquely position an organisation in its industry to create sustainable advantage and superior value relative to the competition. The five choices form a cascade:…
A disproportionate share of value creation in any industry accrues to the leader. This economic reality makes the explicit pursuit of winning essential rather than optional. Organisations that set out merely to participate, rather than to win, will inevitably fail to make the tough choices and…
Where to play and how to win are the two most critical choices in strategy formulation. They form the heart of the strategic choice cascade, defining what the organisation will actually do, where it will do it, and how it will create competitive advantage. These two choices are tightly bound and…
Sustainable competitive advantage arises not from any single capability but from a system of reinforcing activities that fit together and make one another stronger. Michael Porter articulated this concept: a company's strategic position is contained in a set of tailored activities designed to…
The traditional strategy process is broken. Teams seek a single right answer through exhaustive analysis, argue over financial projections, make compromises to build consensus, and then aggressively sell the result to senior management. This approach is expensive, superficial (because it tries to…
By the late 1990s, Oil of Olay was in trouble. Once a household name, the brand had earned the unflattering nickname "Oil of Old Lady" as its customer base aged and its sales stalled below $800 million in a $50 billion category. The pink cream in a simple plastic bottle, sold at $3.99 in drugstores,…
Winning aspirations are the guiding purpose of an enterprise, setting the context for every subsequent strategic choice. Companies like Starbucks, Nike, and McDonald's frame their missions around customers, but a lofty mission alone is not a strategy. The critical distinction is between playing to…
Where-to-play choices define the competitive playing field across five dimensions: geography, product type, consumer segment, distribution channel, and vertical stage of production. Every where-to-play choice is equally a choice about where not to play. Three dangerous temptations must be avoided:…
There are only two generic ways to win in any industry: cost leadership and differentiation. In cost leadership, profit comes from having a genuinely lower cost structure than competitors while offering comparable products. In differentiation, the company offers products perceived as distinctively…
Most corporate mergers destroy value. Quaker paid $1.7 billion for Snapple in 1995 and unloaded it three years later for $300 million. Time Warner valued AOL at $190 billion at the time of their merger and spun it off a decade later for just $3 billion. Yet P&G's 2005 acquisition of Gillette,…
Management systems are the most neglected element of the strategic choice cascade. Without supporting structures, systems, and measures, strategy remains a wish list. Three types of management systems are essential: systems for creating, reviewing, and communicating strategy; systems to support core…
Scores of analytical tools exist for strategic thinking, from SWOT analysis to the BCG growth matrix to the VRIN model. Each has its uses, but none considers the full strategic landscape. Used together, they produce an unfocused mass of data and analysis. The strategy logic flow provides a more…
In strategy, there are no absolute answers or sure things. Building a strategy is not about achieving perfection; it is about shortening your odds. The traditional strategy process is deeply flawed: an internal team or external consultant analyses everything, a few plausible options emerge under…
By A.G. Lafley, Roger L. Martin
Subject
Themes
Strategy is an integrated set of choices that uniquely positions an organisation to create sustainable advantage and superior value. At its core, strategy is choice, and winning must sit at the heart of every strategic decision. Too many organisations confuse strategy with vision statements, plans, reactive responses, optimisation, or mimicry of best practices. None of these constitutes genuine strategy because none involves making the hard, explicit choices that winning demands.