Five observations on developing business strategies for start ups
This week, we are sharing a recent Startup Magazine article titled Play To Win: How To Develop Business-Winning Strategies for Startups. Author Benjamin Chong provides strong insights and recommendations, and I’d like to offer a few more.
5 Observations on Developing Business Strategies for Startups
We know from experience and, more importantly, from broad customer feedback that Playing to Win strategy works across a multitude of companies. From large corporations to small nonprofits, freelancers to five-person startups, Playing to Win strategy works. That’s why Playing to Win: How Strategy Really Works, the book this article is based on and for which I and Roger Martin are co-authors, continues to sell and improve the performance of businesses, organizations and individuals across the world.
The best What is Winning choices tend to combine an aspiration with a measurable goal. For example, to improve the lives of more consumers, become a leader in the category, achieving the highest market share and delivering the best operating and market total shareholder returns.
The most important Where to Play choice is whom to serve. Who should you serve? Which consumers or customers are your prime prospects? Which generate the best long-term value creation?
There’s often confusion between the How to Win choice and the Must-Have Core Capabilities choice. Really, there are only three How to Win positioning strategies:
a. Lowest cost producer/provider (which, by definition, there is only one of - at least for each industry, category, or geography)
b. Differentiated brand/product or service
c. Narrow, highly-focused niche player
In contrast, there is a much broader range of Must-Have Core Capabilities. In addition to being critical competencies, they also end up being important ways to win because of the sustainable competitive advantage they can create.
At Procter & Gamble, after a lot of analysis and even more discussion, we agreed on five capabilities that we believed would create sustainable competitive advantage:
a. Superior consumer understanding
b. Expertise in product innovation and core technologies
c. Expertise in brand creation and building
d. Superior partnerships with key customers and suppliers
e. Superior global scale and scope
Deciding on these five core capabilities drove investments in resources, talent and technology. In fact, P&G invested several times more in cutting-edge market research compared to their key competitors, year in and year out, to gain and sustain competitive advantage.
The Playing to Win strategy choice cascade is a coordinated and integrated set of choices that benefit from iterative and integrative analysis. This approach to strategy does not guarantee success, but it consistently and reliably improves businesses’, nonprofits’ and freelancers’ odds of achieving their aspirational winning results.