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Group No- 18

Playing to Win: How


Strategy really
works
Book Review

Table of Contents
Introduction........................................................................................................... 3
Chapter 1............................................................................................................... 4
Chapter 2............................................................................................................... 7
Chapter 3.................................................................................................................. 8
Chapter 4............................................................................................................. 10
Chapter-5................................................................................................................ 12
Chapter- 6............................................................................................................... 15
Chapter 7................................................................................................................ 18
Chapter 8................................................................................................................ 21
Conclusion........................................................................................................... 22

Introduction

Strategy is all about making specific choices. According to Mike Porter, a firm creates a
sustainable competitive advantage over its rivals by deliberately choosing a different set of
activities to deliver a unique set of values. Strategy therefore requires making explicit
choices- to do some things and not others and building a business around those choices.

A.G. Lafleys Playing to Win with co-author Roger Martin is a masterpiece in the genre of
Strategic Management. It acts as a lighthouse for those working on New Product
Development or Innovation. Playing to Win outlines a proven method that has worked for
some of today's most celebrated brands and products. Authors claim that instead of working
to develop a winning strategy, leaders tend to approach strategy in one of the following
ineffective ways:

Defining strategy as vision


Defining strategy as plan
Dismissing the possibility of long term strategy
Defining strategy as optimization of status quo
Defining strategy as following best practices

The authors argue that these approaches are driven by a misconception of what strategy really
is and reluctance to make truly hard choices. They further accept the fact that it is natural to
want to keep options open as long as possible, rather than closing off possibilities by making
explicit choices. But it is only through making and acting on choices that you can win. A.G.
Lafley and Roger Martin opine advocates that a strategy is a coordinated and integrated set of
five choices: a winning aspiration, where to play, how to win, core capabilities and
management systems. An attempt has been made to provide the reader do it yourself guide to
strategy. We appreciate the arguments extended by the authors in this regard. By quoting
examples of P&G, several concepts and notions related to strategy have been demystified but
these justifications hold true invariably for all the firms irrespective of their type, the authors
claim

Chapter 1

In Chapter 1, Strategy is Choice, the authors stress a key point regarding strategy that
should be well known to all New Product Development practitioners strategy decision area
s much about what the firm will not do as what it will do. Olay, authors define had a strategic
problem that many companies struggle with- a stagnant brand, aging consumers,
uncompetitive product, strong competition and momentum in the wrong direction. So, why
was olay able to succeed spectacularly while so many failed? The people at olay arent hard
working, more dedicated, luckier than anyone else. But there way of thinking about the
choices they made was different. They had a clear and defined approach to strategy, a
thinking procedure that enabled managers to effectively make clearer and harder choices.
That process, and the approach to strategy that underpins it, is what made the difference.
We adhere to authors opinion that strategy can seem mystical and mysterious. It isnt. It is
easily defined. It is a set of choices about winning. Again it is an integrated set of choices that
uniquely positions the firm in its industry so as to create sustainable advantage and superior
value relative to the competition.
The Five Choices
This process is built on a set of five integrated choices. "These choices and the relationship
between them," the authors explain, "can be understood as a reinforcing cascade, with the
choices at the top of the cascade setting the context for the choices below, and the choices at
the bottom influencing and refining the choices above." One of the first examples used in the
book is P&Gs Oil of Olay product, once a floundering brand known derisively as "Oil of Old
Lady." Building on their framework, Lafley and Martin break down the cascade of strategic
choices that led to the brands impressive turnaround. Here are a few of them:
1. What is our winning aspiration? This choice refers to "the purpose of the enterprise," the
authors write. For Oil of Olay, it was to become a leading skin care brand again.
2. Where will we play? This second choice identifies specifically where the product or
company will compete. The Oil of Olay brand stayed with its mass market retailers (e.g.,
Target and Wal-Mart) rather than the prestige stores (e.g., Macys). But it positioned itself as
a "masstige" product higher end (and higher priced) than the traditional mass market
beauty product.

3. How will we win? This question must be answered with a clear value proposition and a
path to competitive advantage. Among Oil of Olays winning strategies was producing a
better anti-aging skin care product a product at the right price (e.g., not too low) that
would entice the prestige customer base.
4. What capabilities must be in place? The task here is to define the activities and
competencies that support the where-to-play and how-to-win choices. Oil of Olay, for
example, was able to leverage P&Gs strengths in consumer understanding and brand
building.
5. What management systems are required? Likewise, strategists must define the systems,
structures and measures required to support the choices. Oil of Olay was also able to leverage
P&Gs systems as well as its channel and partner systems. This framework can be applied at
all levels of the company, including the organization level, strategic group or, as in the
example above, the single business unit, the authors write. Clearly, the choices need to
support each other among the different levels.
We found this framework interesting as these choices and the relationship between them
helps to understand the reinforcing cascade, with choices at the top of the cascade setting the
context for the choices below, and choices at the bottom influencing and refining the choices
above. In a small organization there may well be a single choice cascade that defines the set
of choices for the entire organization. But in larger companies there are multiple levels of
choices and interconnected cascades. Strategy can be created and refined at every level of the
organization using the choice cascade framework.
In our view, the authors by providing the aforementioned framework have attempted
to facilitate an individual or a firm to find way through full choice cascade. Doing so isnt a
one way linear process. There is no check list, whereby one creates and articulate aspirations,
then move on to where-to-play and how-to-win choices, then consider capabilities. Rather,
strategy is an iterative process in which all the moving parts influence one another and must
be taken into account simultaneously. A company must understand its core capabilities and
consider them when deciding on where to play and how to win. But it may need to generate
and invest in new core capabilities to support important, forward looking where-to-play and
how-to-win choices, too. Considering the dynamic feedback loop between all five choices,
strategy isnt easy. But it is doable. A clear and powerful framework for thinking about

choices is a helpful start for managers and other leaders intent on improving the strategy for
their business or function.
Further we are of the opinion that by suggesting a comprehensive dos and donts while
making a strategic choice, the authors have facilitated decision making process, These can be
enlisted as

Do remember that strategy is about winning choices. It is coordinated and integrated


set of five very specific choices. As one defines strategy one should be careful in

choosing what to do and what not to do.


All five choices should be accessed while making decisions. One should refrain from
stopping in between and should try to answer all the five question to create a viable,

actionable and sustainable strategy.


Strategy should be looked upon as a iterative process. As one uncovers insights at one

stage in the cascade, one may be required the revisit choices elsewhere in the cascade.
It should be understood that strategy happens at multiple levels in the organization.

An organization can be thought of as a set of nested cascades.


It should be kept in mind that there is no perfect strategy. One should adopt the one
that suits one better.

Chapter 2

In chapter 2 What Is Winning, the authors argue that the essence of great strategy is
making choices, like what business to be in and which not to be in, where to play in the
business you choose, how you will win where you play, what capabilities and competencies
you will turn into core strengths, and how your internal will turn those choices and
capabilities into consistently excellent performance in the marketplace.
In our opinion unless winning is the ultimate aspiration, a firm is unlikely to invest the right
resources in sufficient amounts to create sustainable advantages. But aspirations alone are not
enough. One should play with the intention to win rather than just to participate. To set
aspirations properly, it is important to understand who you are winning with and against. It is
therefore important to be thoughtful about the business you are in, your competitors and your
customers.

Chapter 3

The beginning of chapter 3 Where to Play is marked by the description of TV commercial


featuring Nancy Walker as a diner waitress. It established the paper and towel brands in the
heart and minds of the consumers. This threatened the market leader Bounty, a stalwart brand
for P&G. During this time P&G was focussing on expanding and simultaneously loosing on
its home turf. This example compelled us to ponder upon the strategies related to
geographical expansion. For P&G, the global business was clearly turning problematic, but
so too was the lack of strategic focus
The choice of where to play defines the playing field for the company. We have figured out
that it is really a question of what business one is really in. It is a choice about where to
compete and where not to compete. Understanding this choice is crucial because the playing
field one choose is also the place where on will need to find ways to win. Where-to-win
choices occur across a number of domains viz., geography, product category, consumer
segment, distribution channel, vertical stage of production etc.
The authors should be appreciated for elaborating where to play choice. We understand that
many individual considerations need to go into the comprehensive where to play choice. And
the considerations are the same no matter the size of the company or the type of industry.
Start-ups, small businesses, regional or national companies and even huge multinationals all
face an analogous set of where to play choices. The answers of course differ. Small
businesses may well have narrower where to play choices than large companies do, largely as
a function of capacity and scale. But even the largest companies must make explicit choices
to compete in some places, with some products, with some customers. A choice to serve
everyone or to serve all comers is a losing choice.
We understand choosing where to play is about choosing where not to play. This is more
straightforward when one is considering where to expand (or not), but considerably harder
when considering whether one should stay in the places that one is currently serving. A lot is
considered when crafting a wining where to play choice from consumers to channels to
customers; to competition; to local, regional and global differences. In the face of that kind of
complexity, a strategy can easily fall prey to oversimplification, resignation even desperation.

In particular care should be taken to avoid three pitfalls. The first is refusing to choose,
attempting to play in every field all at once. The second is to attempt to buy a way out of an
inherited and unattractive choice. The third is to accept a current choice as inevitable or
unchangeable. We have figured out that the heart of strategy is the answer to two fundamental
questions: where will you play and how will you win there? Exploring how to win where one
plays dwells into creating integrated choices, in which where to play and how to win
reinforce and support rather than fight against each other.

Chapter 4
The author in Chapter 4 talks about How to win strategy. This question clarifies activities
of your firm, which also include its competitive advantage. This is companies strength in
chosen market segment, geographies etc. How to win is associated with where-to-win, you
dont try to win everywhere, but only in your chosen domains.
Choosing where-to-play might involve a series of important dimensions but when you
decide how-to-win, it always comes down to one of two choices:
a) Low Cost become low cost player and continue advantage by continuing low cost
b) Differentiator become a differentiator who charges premium because of some added
value to your product or services.
Author points out that, there are always multiple ways to win in every market and no market
is truly winner- takes -all. Nor will there be a perfect strategy which lasts forever and is
always true. Even in a single market, it will be feasible for one company to succeed as the
cost leader while others excel as differentiators. Managers have to think broadly and deeply
to think strategically. Having made that point, once a manager makes a how-to-win choice, he
then have to take actions which are consistent with the direction you've chosen to go. In other
words, what company need to do to succeed as the cost leader is distinctively different from
what it must do to compete as a differentiator. Once company decide which path it will go
down, it's vital that it undertake activities which are consistent with that choice.
If company decide cost leadership having a lower cost structure than its competitors is
its best shot at a winning strategy, then it needs to obsessively focus on pushing costs out of
the value chain. Firm will spend the bulk of its resources on initiatives to standardize and
systematize everything. Cost leaders don't always charge less than their competitors but they
might choose to use the excess cash in different ways. For example, Mars holds a distinct
cost advantage over Hershey's in candy bars but Mars sells at much the same retail price.
Mars uses the extra revenue to buy the best shelf space in every convenience store in
America and has thus grown from a small niche player into a contender for overall market
leadership.
The alternative to low cost is differentiation. Here, company is attempting to offer products

or services which customers perceive to be more valuable than other competitive offerings. It
still keep an eye on your costs but it come up with offerings which will appeal to specific
market niches. Firm try and differentiate along a dimension customers care about product
design, product performance, product quality, branding, advertising, promotion, etc. The
more a product is differentiated, the more it can charge for it as evidenced by Starbucks
charging $3.50 for a cappuccino or Hermes charging $10,000 for a bag.
In the end author points out that, neither cost leadership nor differentiation are guarantees of
commercial success. There is no killer strategy which will last for all time. This is why
getting better at strategic thinking is useful. Having this capacity will allow managers to
figure out the best way forward when competitors encroach. Companies how-to- win choice
needs to be supported by a strong where- to -play choice and vice versa. It needs both
choices to reinforce each other to create a distinctive combination. Managers need to always
be thinking about questions like: "What how-to-win choices make the most sense for which
where-to -play choices?" and "Which combination makes the most sense for us given our
unique set of capabilities?" If managers think about these things, they can create a strong
strategic core for their company.

Chapter-5
Summarising the key strategic choices, Chapters 5 describes about strengthening a firms
core capabilities and building management systems and processes to grow these core
capacities within the company. While many firms claim their people are their core capability,
the true strategic linkage comes from being customer-centric and providing a meaningful,
competitive advantage. For Procter and Gamble (P&G), the core capability is housed in
market research. Consumer studies have allowed P&G to develop insightful new products
that offer unique customer advantage among competitors.
He further explained that once the management team has a sense for its aspirational goals,
where it wants to play, and how it is going to win in its chosen markets, the question then
becomes what capabilities must be in place to be able to win? Some minor realignment
may be required due to potential changes in strategic direction, or, at the other extreme a new
set of capabilities may be required (e.g. human resources, processes, technology, strategic
alliances, marketing / sales, leadership, channels, etc.) Capabilities enable the organization to
distinguish itself from rivals as the strategy is implemented. Competitors will of course react
to any shifts in the competitive environment. As a result, continual investment in the
strengthening of core capabilities will be required in order to sustain any competitive
advantage.
The core competence of an organization is generally not related to just one area of strength. It
is the integration of reinforcing competencies that creates competitive strength and holds the
potential for sustainable competitive advantage. Consider a braded rope.
It is the weaving a different strands of rope together that provides the strength. And so it is in
organizations. An organization may begin with one area of unique strength that provides it
with a leadership position for a period of time. Without further support, investment or
reinforcement, the chance of a competitor replicating that strength over time may be in excess
of 99%. For example a company may start with extraordinary people. Over time competitors
could hire away those people or invest in their own people until the capabilities within the
competitors company over take those in the firm that initially had the lead. However by
investing in other reinforcing strategic elements (i.e. other strands for rope) the chance of
competitor replication / imitation can be substantially reduced. These could include world

class learning and development,attractive variable compensation programs, unique employee


benefits, fair and meaningful performance management systems, and leading-edge employee
development programs. Capabilities arekey to sustaining the ability to win and many of those
in some way relate to human resources.
A good way to visualize and understand those capabilities is to develop an "activity system
map" which visually captures on a single page the core capabilities of your firm.
When Procter & Gamble got its senior management team together, they decided P&G had
five core capabilities:
1. P&G was very good at being able to really understand its customers and bring to the
surface their unmet needs.
2. P&G had expertise and experience in launching and cultivating strong brands with
longevity in the marketplace.
3. P&G has a strong research team. It is highly skilled at developing breakthrough products
and finding ways to get them to market.
4. P&G is good at working with other companies to develop business plans which share the
value created equitably.
5. P&G has learned over the years how to make the most of its global scale.
He also mentioned that while preparing an activity map, one needs to put the key capabilities
as large nodes. The links between the nodes represent supporting relationships which make
each capability stronger. The system as a whole should therefore be stronger than any of the
individual capabilities.Other activities can be added as small nodes on the map. After
preparingthe activity map, one can then ask:
Is our map distinctive?
Is it similar to or quite different from the activity maps of our main competitors?
Is our system defensible? Could it be easily replicated by someone else?
Does our map underpin the specific where-to-play and how-to-win choices we've made?
If the current business that has just a single product line or brand, the activity map should be
reasonably straightforward to draw. In a corporation with multiple brands for different
markets, map which has multiple layers should be drawn one for each brand or one for each

business unit. This will help to add the connector between the multi-layer maps.
Thus with this company can add the competitive advantage of one brand to another one and
can gain the synergy of the combination of both brand.
By identifying the capabilities required to achieve competitive advantage, the firm can
apply resources, attention, and time to the things that matter most. There may well be work to
do to bolster and grow those capabilities, including training and development, investing in
additional resources, building supporting systems, and even reorganizing the company around
the capabilities.
The activity system should be feasible, distinctive, and defensible if it is to enable you to win.
If the system is missing any of these three qualities, you need to return to the where-to- play
and how-to-win choices, refining or even entirely changing those choices until they result in a
distinctive and winning activity system."

Chapter- 6
What P&G started concentrating on was the power of simplicity and clarity in strategies,
which were formulated by the organisation to be best understood and internalized by it.
Strategies are more likely to be empowering and motivating if they are explained in few
compelling words since they make it easier to choose and take action. The earlier senior
leadership teams were trained to see strategy reviews as anything but an opportunity to share
ideas. But what was needed was to decide on what a strategic discussion is and isnt and for
this review meetings were held. The three fold culture-busting kickers were adopted: No
presentations, limited number of members in the discussion room and allowance of maximum
three pages for meetings. The reasons for shift in the process was to be dialogue oriented,
benefit from experience of senior leaders and build the strategic-thinking capabilities of
P&Ms executives. The dialogues, instead of presentations, focused on few critical strategic
issues identified in advance. This would create the much needed multinational leaders who
could both make tough strategic calls and lead effective operating teams.
Slowly the review meetings became an enquiry into the competitiveness, effectiveness and
robustness of a strategy. It soon became a normal course of business and the quality of the
discussions improved. The complete idea of meetings was to how to play and how to win.
The meetings were successful as nothing came as a big surprise and the teams use to prepare
for the things to come, thereby adding to productive dialogue and value addition to the
strategic viewpoints. The strategy dialogue went on at all levels of the organization, focusing
on core competitive capabilities and management systems. This helped keep the strategy on
track.
But the peoples default mode of communication tends to favour their own conclusions and
theories. P&G tried to effectively make the people embrace a particular stance about their
role in a discussion. This led to people putting forward their views as possibility and not as a
single right answer. The understanding would increase through a balance of advocacy and
inquiry. This included three key tools: Advocating ones own position and then inviting
responses, paraphrasing what one believes to be the other persons view and inquiring as to
the validity of their understanding and asking for more information, if there is a gap in
understanding the other persons views. This has a powerful effect on the group dynamics.

P&G also recognized the importance of teams to the development of strategy. To create a
truly robust strategy requires the capabilities, knowledge and experience of a diverse team,
with each member aware of how his or her own effort contributes to the success of the group.
The reframing and restructuring was required and P&G started off with reaffirming its
purpose, values and principles. A preexisting management system for describing strategy was
leveraged: the OGSM, a one-page document that captures objectives, goals, strategy and
measures for a brand, category or company. The OGSM became the foundation of all manner
of discussions, effectively grounding branding, capital allocation and innovation strategies in
where to play and how to win. The principles defined were to serve the worlds consumers
and to make everyday lives of consumers better with P&G brands and products. The
company focused on integrity and trust as the fundamental basis of doingbusiness with
consumers, customers, partners, suppliers etc. The organization believes that all P&G-ers are
owners of the company and leaders in their respective businesses. The company prioritized
consumers ahead of all stakeholders, including customers, shareholders and employees as the
core objective of business is to create and serve the consumers in the best way possible. P&G
further progressed to strategise on how to win the consumer value equation and the first two
consumer moments of truth. The former dealt with increasing the gap between the value it
offers to consumers and the cost of delivering that value than competitors gap. The two
moments of truth are when the customer encounters the product in the store for the first
time and when he or she first uses at home. P&G wanted to elevate the significance of the
first moment of truth, illustrating the importance of in-store experience in winning. The
important point here is the simple, memorable and evocative use of language to convey the
message to others.
P&G created supporting systems for each of its core strength. On consumer understanding, it
invested in new consumer-research methodologies. It invested significantly in understanding
the innovation process and in exploring disruptive innovation. It further formalized its brandbuilding framework and set out to create new brands that would improve the lives of the
consumers. In order to serve consumers better, P&G talked about retail customers and
suppliers as strategic partners. It invested significantly in scope and scale. Consolidating
purchasing globally, whether for advertising or chemicals or packaging, dramatically
increased P&Gs scale advantage and cut costs substantially. The company started
considering its employees as the primary assets.

P&G further focused on measurement of desired outcomes as it provides focus and feedback.
Without such defined measures, one can fall prey to the human tendency to rationalize any
outcome as more or less what you expected. These measures would span financial, consumer
and internal dimensions, to prevent the team from focusing exclusively on a single parameter
of success. The methodology to compare P&G to competitors was changed. It shifted from
market TSR to Operations TSR (total shareholder return). The operations TSR includes sales
growth, profit margin improvement and increase in capital efficiency. Also apart from
technical product performance, P&G explored the other measures that might drive consumer
preference, purchase and overtime, loyalty.
Every company needs systems to formulate, refine and clearly communicate the essentials of
the strategy choice cascade throughout the company. It needs systems to support and invest in
core capabilities and measure the attainment of goals. Building management systems needs
time, money and focus. There is no one-size-fits-all set of systems. They need to be geared to
individual context and capabilities. The five choices of the strategy choice cascade
summarize and defines the strategy for an organization.

Chapter 7

Till chapter 6, the author has framed five questions in strategic choice cascade and explained
that all the five steps needs to be properly co-ordinated to have a powerful strategy and
competitive advantage. In chapter 7, the author provides guidance on how to organize
strategic thinking and synthesize complex data. Author begins with the point that there are
times when we dont have clarity about what our winning aspiration should be. In these
situation it is better off to first find out where to play and how to win first and then come back
to later to refine what our winning strategy can be and should be.
The author suggests that figure out where-to-play and how-to-win, we can use tools
something like a SWOT analysis (strengths, weaknesses, opportunities and threats) but none
of these will give a panorama view, all we will end up with is an overwhelming amount of
data which is unfocused. The book suggests to use what can be termed a "strategy logic
flow". Strategy logic flow analyzes companies current reality, context, challenges,
opportunities and lead to development of multiple possible choices. It identifies four major
dimensions for leaders to consider-the industry, the customers, a company's relative position,
and the competition-and then present seven questions that systematically evaluate these four
dimensions.
Industry: Here author suggests analyzing the industry landscape and figure out whether or not
this looks like an attractive industry to be in. Furthermore, look at the background drivers of
any changes which are occurring and ask how the game could be changed if you enter the
market or expand your activities. On a broad term under industry the author talks about
segmentation and attractiveness. For segmentation he suggests to look beyond the current and
obvious segments do not exist. He explained it with example of Crest, how it being leader of
cavity protection segment fell flat footed when Colgate entered the industry with Colgate
total care toothpaste. P&G oral care team soon started to consider oral care in terms of full
regimen rather than single products. They launched a whole range of oral products with this
targeting a whole new segment. After analyzing attractiveness of different segments
important is to understand structural attractiveness of each segment , this point is same as
discussed in SCP theory in Strategic management class. As per SCP theory industry structure
play an important role in deciding profitability of a business. The author discusses in the

same line. The author discusses Porter five forces to understand industry attractiveness.
Industry attractiveness is very important in terms of deciding where to play choice. It also
helps to migrate industry to structurally attractive business and away from less attractive
ones.
Consumer Value Analysis: Its very important to understand what customer values. It includes
understanding underlying needs. As customer the company means both the end consumer and
the channel intermediary customers. In Channel value analysis, a company access what a
channel customer and end customer want and need and what value they derive from firms
product and services relative to the cost they incur from buying the product or services. For
Channel customers, profit margin, the ability to drive traffic, shelf space, and delivery
consistency all form part of value equation, it is important to understand channel value
equation to decide which business to be in and how to win there. Author has explained that
traditional way of understanding consumer is not of much use. For understanding well it
needs deep engagement with customer, in fact in P&G they have a Consumer and Market
knowledge team which resort to understand the need on ethnography and other qualitative
tools. There work is to understand their consumer so well to develop mutual business goals.
Relative positioning: figure out how your company would fare and how would it rate relative
to the competition on cost and capabilities. When author discusses capabilities it is more in
terms of resource based view. He talks about how can a company use its capabilities to meet
consumer need in distinctively valuable way i.e. differentiation strategy, or to give same
value as competitor but at lower cost i.e. cost leadership. The author further explains relative
positioning with P&G example on how P&G exited from pharmaceutical business mainly
because P&G was not able to use its capability of brand building here. It is also an example
of unrelated diversification and why it does not work.
The questions company need to work through for analyzing relative positioning include: - How do our capabilities stack up when compared to those of our competitors? Could
we reconfigure in some way that would meet the needs of customers in a distinctive
way?
How would our costs compare to those our competitors would enjoy? Would we be
able to gain a competitive advantage by bringing scale, branding, and expertise in
other areas to bear in serving customers better?

Competition: The author explains to try and anticipate what your competition will do and
how will they probably respond to the course of action you are considering. After you've
looked at the industry, analyzed customers and developed some sense of how you would be
positioned, you always have to deal directly with the issue of whether or not a competitor
could undermine you or trump what you're offering. Admittedly this is guesswork but you
don't want a strategy which a competitor will better in a heartbeat. Therefore, you ask:
How will competitors react if we enter this market segment?
In words of the authors;
To make good choices, you need to make sense of the complexity of your environment. The
strategy logic flow can point you to the key areas of analysis necessary to generate
sustainable competitive advantage. Throughout the thinking process, be open to recasting
previous analyses in light of what you learn in a subsequent box. The basic direction of the
process is from left to right, but it also has interdependencies that require a more flexible
path through it."
"In strategy, there are no absolute answers or sure things, and nothing lasts forever. In the
end, building a strategy isnt about achieving perfection; its about shortening your odds."

Chapter 8
This chapter explores group decision making and provides practical insight on how to put the
strategic choice cascade into practice. The authors critique the traditional approach to
generating "buy-in" and offer a process to focus on the critical questions for determining
strategy. This process enables leaders to "reverse engineer" the possible outcomes and make
informed choices. The authors walk the reader through seven steps from framing a choice and
broadening the options, to using a strategic logic flow and testing outcomes.
In a more elaborate way author starts by explaining how in traditional approach we form a
hypothesis and search for buy-ins to support our hypothesis, The traditional approach is
expensive and time consuming. It is difficult to see the whole picture and hard feeling emerge
in each individual as everyone tries to advocate his idea. Since the goals is for everyone to
buy in, weak compromises are made instead of real ones. Creativity is discouraged; pressure
on convergence on an answer on basis of existing data eliminates the possibilities of options
that are off stream. More importantly the obvious weakness with this approach is other
people only become involved once the strategy is buttoned up and finalized their ideas don't
get taken into account during development
Author suggests that a better approach to generate buy in is to ask right question. He suggests
that asking a single question What would have to be true for this to be a good idea. That is,
you take the various where-to -play and how -to-win options and work backwards. To reverse
engineer a good strategy, the steps are:
1)
2)
3)
4)
5)
6)

Discuss options and come up with multiple where to play and how to win choices
For each choice, ask what would have to be true for that to be a great ides
Figure out which of these conditions seems the least likely to hold true.
Design some good test of the weakest link identified
Conduct test designed, starting with conditions which feels most likely to be true
Based on test results, chose which where-to-play and how-to-win is best.

This process broadens the possibilities up front and then systematically narrows the field. It
leverages different perspectives to enrich the discussion, rather than bogging it down.

Conclusion
Author clearly states that, there is no such thing as the "perfect strategy". There is never a
guaranteed formula for securing a sustainable competitive advantage in any industry or line
of business. The six most common strategy traps are:

Embracing a do-it-all strategy failing to make deliberate choices and trying to make
everything top priority. Strategy is choice, pure and simple.

Having a Don Quixote strategy where company attack their strongest competitors. It is far
better off going somewhere where company can win.

Falling for the Waterloo strategy trying to fight wars on multiple fronts. No company can
do everything well. If it try, it will end up doing everything poorly. Be confident about its
strengths.

Using a something-for-everyone strategy where company attempt to capture all segments


at once. To create real value, company have to choose to serve some consumers
exceptionally well and to ignore everyone else.

Employing a dreams-that-never-come-true strategy where company have noble


aspirations but never quite translate them into concrete where-to-play and how-to-win
choices. Aspirations are not strategy, even noble aspirations.

Utilizing a program-of-the-month strategy where company try and chase the same
customers as its competitors. Its strategy must be distinctive to work. The more it look like
everyone else, the lower its chances of success become.

After explain the strategy trap the author also list down some sign which indicate winning
strategy.

Company will have an activity system in place which is distinctive and different which
makes sense if company is attempting to deliver value in a unique way.

Company will have customers that adore it and non-customers who cannot for the life of
them figure out why anyone buys from that company.

Company will have successful and profitable competitors which is good because it
means they don't have to attack it to survive.

Company will have more to spend on resources than its competitors do which means it
is gaining the lion's share of the added value in its marketplace.

Company will have competitors who attack each other because the company look like a
harder target to them.

Company will have customers who look to it to innovate which means they believe in it
are uniquely positioned to create value for them.

If any company have these telltale signs present, that's great but don't rest on it. No strategy
ever lasts forever. Company have to keep progressively sharpening and evolving its
strategy to keep winning year after year. Strategy is more of an ongoing process than a
result. And the author ends by note that Keep playing to win.