{"id":47175,"date":"2021-08-19T18:18:00","date_gmt":"2021-08-19T22:18:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=47175"},"modified":"2021-08-30T14:55:10","modified_gmt":"2021-08-30T18:55:10","slug":"playing-to-win-framework","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/playing-to-win-framework\/","title":{"rendered":"How to Apply the Playing to Win Framework"},"content":{"rendered":"\n

What is the Playing to Win<\/em> Framework? How can you apply the Playing to Win<\/em> strategy framework?<\/p>\n\n\n\n

The Playing to Win<\/em> framework is a set of five choices that include having a winning aspiration<\/a>, knowing where to play, knowing how to win, developing core capabilities, and fine-tuning your management systems. These choices help you win in the marketplace. You can only use the framework successfully after answering the five questions in the strategic choice cascade<\/a>.<\/p>\n\n\n\n

Read on to learn how to implement the Playing to Win<\/em> framework.<\/p>\n\n\n\n\n\n\n\n

Get Through the Cascade<\/strong><\/h2>\n\n\n\n

Now that we understand the five steps of the cascade, we\u2019ll delve into exactly how <\/em>to make decisions at each step. There\u2019s no formula for success, but there are frameworks that, if used correctly, can serve as a jumping-off point and make correct decision-making<\/a> more likely. <\/em><\/p>\n\n\n\n

As a general rule, remember that no decision is final and that each step of the cascade affects the other steps and can change based on changing market conditions.<\/p>\n\n\n\n

Applying the Playing to Win<\/em> Framework<\/strong><\/h3>\n\n\n\n

Here are the five steps for applying the framework from Playing to Win:<\/em><\/p>\n\n\n\n

Step 1: Identify Your Winning Aspirations <\/strong><\/h4>\n\n\n\n

Given that strategy is frequently changing, don\u2019t worry too much about creating a definition of winning that\u2019s perfect. Instead, agree to continue to return to your winning aspirations as you define the other pieces of the Playing to Win framework.<\/p>\n\n\n\n

Steps 2 and 3: Decide Where to Play and How to Win <\/strong><\/h4>\n\n\n\n

To implement the Playing to Win<\/em> framework, you must decide where to play and how to win<\/a>. When making your choices, consider four questions, which you can think of as a flowchart that moves from the first question to the last. Answer them in order and then make a strategic choice based on your answers:<\/p>\n\n\n\n

1) How is your industry structured\u2014who are the big players and small players on the rise\u2014and how much money could its component pieces make you?<\/strong><\/p>\n\n\n\n

Map the industry to answer this question. This is not easy, given that the industry changes<\/a> a lot. For decades, Crest was the #1 toothpaste in the U.S. because it offered protection against cavities. However, in the 90s, as every toothpaste began to offer that service, Colgate took over by offering hygiene more generally. Continually monitor how the industry is changing. <\/p>\n\n\n\n

Also consider how attractive different parts of the industry are. Remember the P&G research with paper towels that found that there were segments of the world where people weren\u2019t interested in buying high-quality paper towels. These segments were thus unattractive to the business. Compete in places that are attractive. This requires an analysis of competition\u2014if there\u2019s too much competition somewhere, it becomes a less attractive industry.<\/p>\n\n\n\n

2) What do your customers want?<\/strong><\/p>\n\n\n\n

In cases like P&G, which sells to retailers, \u201ccustomers\u201d includes both the people who are buying P&G products on the shelves and the retailers the company sells to. <\/p>\n\n\n\n

If your company is <\/em>selling to retailers, think about what they find attractive. They also want high margins and people coming back to their stores. Data about how customers are buying your product and what distributors want can help you decide whether it\u2019s best to pursue a strategy of widespread distribution of a cheaper product or a more prestigious product with bigger margins. If customers are only willing to buy your product at a very low price, the former strategy is likely better. In contrast, if they think of your product as a luxury good and are willing to pay more for it, the latter might be more successful. Additionally, embedding employees with retailers to see what they are looking for and what\u2019s selling can be invaluable to making strategic decisions. <\/p>\n\n\n\n

Every company, whether they are selling to them directly or not, has to worry about their \u201cend consumers\u201d: the people buying the products off the rack. You can\u2019t just ask them what they want. Customers don\u2019t always know what they want until you show them something new\u2014as Henry Ford said, before the invention of the car, people would have said they want a faster horse. So you have to invest a lot of resources to ascertain customer needs\u2014observe customer patterns, what they buy, what they look at but don\u2019t buy, and what their return rate is. <\/p>\n\n\n\n

3) How is your company measuring up against its competitors?<\/strong><\/p>\n\n\n\n

Ask yourself if you are meeting the needs of your customers better <\/em>than your competitors. If not, and you can\u2019t figure out how to improve based on a good understanding of what your customers want, you might have to exit the sector. <\/p>\n\n\n\n

Additionally, ask yourself if your costs are lower than your competitors\u2019. These two questions determine whether you have a comparative advantage. <\/em><\/p>\n\n\n\n

4) How do you think your competitors will respond to any action you decide to take?<\/strong><\/p>\n\n\n\n

Ultimately, unlike with the other three questions, you\u2019ll have to guess. You can\u2019t predict scientifically what your competitors will do at any given moment. However, you have <\/em>to make these guesses, because if you don\u2019t, you\u2019ll be building a strategy based only on the current equation. If the equation shifts based on a competitor\u2019s response and you\u2019re unprepared, your strategy will completely blow up. <\/p>\n\n\n\n

A good example here is P&G\u2019s decision to launch Joy dish detergent in Japan. Joy was entering a market dominated by two competitors, Kai and Lion, that produced similar dish soaps. Joy made dish soap in a smaller container that dealt with grease better than the leading brands. P&G\u2019s calculation was that the worst-case scenario was that eventually they would come out with a product similar  to P&G\u2019s, but P&G could still invest the resources necessary to win. They were correct in their assessment, and Joy captured a 30% market share and quickly became the leading dish brand in Japan. <\/p>\n\n\n\n

Step 4: Identify the Capabilities You Need to Succeed<\/strong><\/h4>\n\n\n\n

Capabilities are the resources and competencies required to find your market and succeed in it. The Playing to Win <\/em>framework <\/em>outlines five capabilities that are essential to success:<\/p>\n\n\n\n