Do you want to learn how to create and execute a winning strategy for your organization? Do you want to discover the secrets of some of the world’s most successful companies and brands? If so, you should read Playing to Win: How Strategy Really Works by A.G. Lafley and Roger L. Martin, a book that will teach you how to make clear and smart choices about where and how to play in the marketplace.
In this article, I will summarize and review the main ideas and insights from the book, and show you how you can apply them to your own situation. I will also provide you with some additional resources and references that you can explore further. By the end of this article, you will have a better understanding of what strategy is, why it matters, and how you can use it to win. If you are ready to take your strategic game to the next level, read on and learn from the masters of strategy.
Playing to Win (2013) introduces a strategic framework that illustrates how companies can achieve success by making deliberate and well-considered choices. It delves into the “Five Choices Framework,” detailing essential decisions that leaders must make to develop winning strategies. Using real-world examples, it emphasizes that a disciplined approach to strategy can create sustainable competitive advantage and turn companies into industry leaders.
Table of Contents
Introduction: Unlock the strategic secrets behind Olay’s stunning turnaround and apply them to your own business success story
Have you ever wondered how a seventy-year-old brand can reinvent itself and surge back to market leadership? Well, it isn’t just through clever marketing; it’s about strategic prowess intertwined with clever decision-making and positioning in a dynamic marketplace.
To explain exactly how it’s done, in this summary we’d like to focus on one key concept of the book Playing to Win – the captivating story of Olay’s decline and resurgence, showcasing the indispensable nature of strategic thinking in the world of business.
The decline and reinvention of Olay
In the twilight of the 1990s, Olay found itself in trouble. Annual sales had plummeted below the $800 million mark. Once a cherished skin care brand, Olay had now garnered an unenviable moniker – “Oil of Old Lady”. This derogatory label encapsulated the brand’s image in the market: outdated and disconnected. The iconic pink cream, housed in unremarkable plastic bottles and priced at $3.99, simply failed to evoke the allure it once did.
Procter & Gamble – often known simply as P&G – stood at a crossroads. For a company aiming to dominate the beauty sector, having flagship brands in both skin care and hair care was non-negotiable. Their skin care segment, with Olay as its torchbearer, was now their Achilles’ heel. The dilemma? Should they keep Olay as it was; initiate a new brand; acquire an existing brand; introduce their makeup brand Cover Girl to the skincare sector; or breathe fresh life into Olay by pushing it into a novel segment?
P&G chose the path of reinvention. The word “Oil” was jettisoned from its name. The brand itself was overhauled, together with its business model, packaging, and the essence of its value proposition. Their vision was clear: ascend to market leadership in North America, skyrocket sales to the $1 billion mark, establish a global footprint, and carve out a niche middle ground between mass and prestige – a newly-titled masstige segment.
The brand’s focus narrowed down to women aged 35 and above who were noticing their first wrinkles. These were women willing to splurge for quality and remain loyal once their trust was secured. In 1999 Olay launched Total Effects, a product which was a fusion of enriched ingredients and insights, vowing to combat not just wrinkles but multiple aging signs. Gone was the $3.99 price tag. The new Olay, which blended the qualities of prestige products, was presented in mass retail stores at an elevated $18.99. This strategic pricing, coupled with revamped branding and packaging, effectively reshaped its value proposition.
Enlisting the expertise of innovators for top-notch ingredients, collaborating with designers, and teaming up with advertisers, Olay fortified its capabilities. The results post-2000 were nothing short of spectacular. For ten years, Olay basked in double-digit growth, blossoming into a $2.5 billion brand with enviable margins, marking its transformation from a faltering entity to a formidable force in skincare.
Olay’s impressive turnaround underscored a critical aspect of business: the power of a well-defined strategy. But what exactly constitutes a strategy? Let’s delve into that next.
The five questions for a solid strategy
Looking at Olay’s phenomenal comeback, you’re probably wondering what underpins this kind of transformation. Well, it’s all about strategy. At its core, strategizing involves making choices that will make you achieve your goal. But to merely state that would be an oversimplification. So, let’s deconstruct it.
There are five key questions to consider when it comes to strategy:
First, ask yourself, “What’s my winning aspiration?” Think of it as painting a picture of the future, where all your dreams for your project or business come true.
Next, ask, “Where will I play?” It’s about picking your battles. You’re pinpointing the exact segments, categories, even the specific geographies you want to make your mark in.
Once you’ve chosen your playground, ask, “How will I win?” That’s your game plan, your secret sauce for outshining the competition in those chosen areas.
Of course, having a game plan is one thing, but you also need the right tools and skills. That brings us to, “What capabilities must be in place?” You’re listing out all the activities and resources you’ll need to pull off your strategy.
Lastly, it’s about getting everyone on the same page. Ask yourself, “What management systems are required?” This ensures that everyone in the team, from top to bottom, aligns with your grand vision.
Strategy is all about confidently answering these questions and charting a path forward. Each answer builds on the other, guiding you step by step toward your vision of success.
Visualize these choices as a cascading waterfall, each stream feeding into the next. For brands like Olay, these choices interlock seamlessly with those made at broader levels, such as category and company. Their strategic decisions dovetailed perfectly with P&G’s overarching capabilities and objectives. This coherence is essential, for choices at one level can deeply influence, or be influenced by, choices at another.
Strategy isn’t a linear, one-off undertaking. It’s fluid, an iterative dance, with insights continually shuttling between various choices, refining and reshaping them. And while the allure of finding that one “perfect strategy” might be strong, it’s a mirage. The landscape of business is diverse, and what works for one might not for another. The crux is to carve out choices that are distinct, choices that resonate with your unique narrative and strengths.
In essence, strategy is the art of making informed, deliberate decisions to navigate the future — a future where aspirations become reality. Like Olay, the right strategy can elevate a brand from the depths of obscurity to the pinnacle of success. Harness these strategic choices to unleash unprecedented innovation.
Conclusion
Successful strategizing means making deliberate, informed choices. Through Olay’s remarkable transformation, you’ve seen how understanding and answering core strategic questions can take a brand from the brink of obsolescence to market leadership. Crafting a distinct, informed path, like Olay did, not only rejuvenates a brand but sets it on a trajectory toward long-lasting success and innovation. Embrace the power of strategy and chart your own course to triumph.
About the Author
A.G. Lafley & Roger L. Martin
Genres
Marketing, Sales, Entrepreneurship, Management, Leadership, Career Success, Business, Management, Leadership, Strategy, Marketing, Innovation, Decision-Making, Case Studies, Nonfiction, Self-Help
Review
The book Playing to Win: How Strategy Really Works is a guidebook for leaders who want to make clear and smart choices about their business strategy. The authors, A.G. Lafley and Roger L. Martin, are both experienced and successful executives who have helped to transform some of the world’s most iconic brands, such as Procter & Gamble, Lego, and Starbucks. They argue that strategy is not a complex or abstract concept, but a simple and practical one that can be learned and applied by anyone who wants to win in the marketplace.
The core of the book is the strategy choice cascade, a framework that consists of five interrelated questions that every leader must answer:
- What is your winning aspiration? This is the purpose of your organization, the reason why you exist and what you want to achieve.
- Where will you play? This is the scope of your activities, the markets, segments, channels, customers, and products that you will focus on.
- How will you win? This is the competitive advantage that you will create and sustain, the value proposition that you will offer to your customers and the capabilities that you will build and leverage.
- What capabilities must you have? This is the set of skills, processes, systems, and resources that you will need to execute your strategy and deliver your value proposition.
- What management systems do you need? This is the structure, culture, incentives, and measures that you will use to support and align your organization with your strategy.
The authors illustrate each question with real-life examples from various industries and sectors, showing how different organizations have made strategic choices and achieved remarkable results. They also provide tools and techniques to help leaders apply the framework to their own situations, such as the reverse-engineering method, the strategy logic flow, and the where-to-play matrix.
Playing to Win: How Strategy Really Works is a highly recommended book for anyone who wants to learn how to craft and execute a winning strategy. The book is well-written, engaging, and insightful, drawing on the rich experience and wisdom of the authors. The book is also practical, providing a clear and simple framework that can be used by leaders at any level and in any type of organization. The book is not a theoretical or academic treatise, but a hands-on and action-oriented guide that shows how strategy really works in the real world.
The book is not without its limitations, however. The book is mainly based on the authors’ experience with large and established companies, such as Procter & Gamble, and may not be as relevant or applicable to smaller or newer ventures, such as startups or social enterprises. The book also does not address some of the challenges and complexities that leaders may face in implementing their strategy, such as dealing with uncertainty, ambiguity, resistance, or trade-offs. The book also does not explore some of the alternative or emerging perspectives on strategy, such as the blue ocean strategy, the lean startup approach, or the design thinking method.
Nevertheless, Playing to Win: How Strategy Really Works is a valuable and accessible resource for anyone who wants to improve their strategic thinking and decision-making. The book is not a silver bullet or a one-size-fits-all solution, but a useful and adaptable tool that can help leaders to make better choices and achieve better outcomes.