Business Strategy Management

Playing to Win: How Strategy Really Works (Summary)

by A.G. Lafley and Roger L. Martin

How did P&G take Olay, an aging, $200 million drugstore moisturizer, and turn it into a $2.5 billion global powerhouse that successfully competes with luxury brands like Chanel and Dior? They didn't just change the marketing; they made a series of clear, tough choices to redefine the entire battlefield, aiming to deliver a department store-quality experience at a mass-market price.

Strategy is a Cascade of Five Questions

The core of the book is a five-step framework where each choice flows from the previous one. It starts with your Winning Aspiration, then defines Where to Play, How to Win, what Core Capabilities you need, and what Management Systems will support it.

For its Swiffer brand, P&G's aspiration was to dominate household cleaning. They chose to play in the 'quick clean' space, not just mops. They won by creating a superior cleaning system (the 'how'). This required building new capabilities in chemical engineering and device manufacturing, supported by management systems that fostered rapid innovation.

Strategy is What You Choose Not to Do

Effective strategy requires making deliberate, often difficult, choices to focus resources. Trying to be everything to everyone or competing in every possible market is a formula for mediocrity. The heart of strategy is choice.

When A.G. Lafley became CEO of P&G, he forced the company to focus its resources on its core billion-dollar brands like Tide, Pampers, and Crest. This meant actively divesting or de-prioritizing familiar but underperforming brands like Jif peanut butter and Crisco shortening, even though they were iconic.

The Heart of Strategy is 'Where to Play' and 'How to Win'

While all five questions in the cascade are important, the most critical linkage is between the market you choose to compete in (Where to Play) and your unique value proposition for succeeding there (How to Win). These two choices must be tightly integrated.

Pampers decided to 'play' in the premium diaper segment. Their 'how to win' was not just to be cheap, but to be the best-performing diaper on the market, specifically by winning on key metrics like dryness and fit against their main rival, Huggies. Their market choice directly dictated their competitive method.

Your 'How to Win' Must Be a Decisive Advantage

A successful strategy requires more than just a good product; it demands a distinct competitive advantage. The two primary ways to win are through cost leadership (being cheaper) or differentiation (being better/different in a way customers value).

For their high-end dog food brand, Iams, P&G chose a differentiation strategy. They didn't try to compete on price with mass-market brands. Instead, they won by selling through specialty channels like vets and pet stores, building a reputation for superior, science-based nutrition that justified a premium price.

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