PLAYING TO WIN. Vision Council Executive Summit Palm Beach, Florida January 23, 2015

Transcription

1 PLAYING TO WIN Vision Council Executive Summit Palm Beach, Florida January 23, 2015

2 STRATEGY IS ABOUT CHOICES To win, a company must choose to do some things and not others 2

3 STRATEGY IS THE ANSWER TO 5 QUESTIONS What is our winning aspiration? Where will we play? How will we win? What capabilities must we have? What management systems are required? 3

4 WHAT IS OUR WINNING ASPIRATION? 4 General Motors 2013

5 WHAT IS OUR WINNING ASPIRATION? 5 Playing to Play Playing to Win General Motors 2013

6 WHERE WILL WE PLAY? 6 Image courtesy of Intuit

7 STRATEGICALLY DISTINCT SEGMENTS Individual Customers Develop Competitive Strategy Based on an Understanding of Individual Customers? The Industry or... Develop Competitive Strategy Based on Generalizations about The Industry? Segments or... Develop Competitive Strategy Around Clusters of Customers About Which We Can Make Generalizations? 7

8 HOW WILL WE WIN? 8 A Starbucks storefront at night. Starbucks Coffee Company

9 THE TWO FUNDAMENTAL WAYS TO WIN Low Cost Sustainable Competitive Advantage Differentiation 9

10 ALTERNATIVE WINNING VALUE EQUATIONS Margin Cost Value Average Competitor Cost Leader Differentiator

11 LOW COST STRATEGY: SOUTHWEST AIRLINES What is our winning aspiration? America Short haul routes Secondary cities or airports Economy class only Highest employee satisfaction, highest customer satisfaction airline in America Highest profit airline in America 11 Where will we play? How will we win? Lowest costs in the industry Frequent reliable departures Very low ticket prices Limited passenger services Fast gate turnaround What capabilities must we have? Cost management Route planning and design Internet booking expertise Employee selection and motivation What management systems are required? Cost management systems Employee compensation systems Route profitability analysis

12 DIFFERENTIATION STRATEGY: PROGRESSIVE INSURANCE What is our winning aspiration? Non-standard drivers Nationwide Direct and independent agents Underwriting and claims Provide nonstandard drivers a high quality solution Dominate the non-standard segment 12 Where will we play? How will we win? Proprietary pricing expertise Rapid accident scene response Express Quote service High agent service Liquid portfolio What capabilities must we have? Response fleet management Pricing database building and analysis Agent acquisition and training What management systems are required? Pricing management Liquid investment management Fleet responsiveness systems

13 WHAT CAPABILITIES MUST WE HAVE? 13 Burberry Flagship Store, London

14 STRATEGIC CHOICES AT P&G What is our winning aspiration? Grow from the core, focusing on big brands, markets and customers Lead in laundry & home care, beauty and personal care Position to lead long-term in emerging markets Meaningfully improve the lives of the world s consumers Deliver consistent 4-6% top-line and double-digit bottom-line growth Where will we play? How will we win? What capabilities must we have? Consumer understanding Innovation Brand building Go-to-market ability Scale Build highly differentiated brands backed by global scale and ubiquitous distribution? What management systems are required? OGSM Operating TSR measures Leadership Development 14

15 P&G ACTIVITY SYSTEM Global Purchasing Global Business Services Agency Relationships Brand Building Brandbuilding framework Scale Design Consumer Research Leadership Culture Consumerdriven measurement systems Consumer Understanding Customer Teams Innovation Go-to-Market Capabilities GBU/MDO Structure Shopper Marketing Globally Distributed R&D Connect + Develop 15

16 SOUTHWEST AIRLINES ACTIVITY SYSTEM No seat assignments No meals Limited Passenger Service No baggage transfers No connections with other airlines Frequent, Reliable Departures High employee compensation 15-Minute Gate Turns Lean, Highly Productive Ground and Gate Crews Limited use of travel agents Automatic Ticketing Machines Standardized fleet of 737 aircraft Very Low Ticket Prices Short-Haul, Point-to-Point Routes Between Med-Sized Cities and Secondary Airports Flexible union contracts High employee stock ownership High Aircraft Utilization Southwest, the low-fare airline 16

17 PROGRESSIVE INSURANCE ACTIVITY SYSTEM Office on Wheels Train, Empower Adjusters Immediate Response Program Fastest Claim Response and Settlement Rely on Word-of-Mouth Referrals Smartest Pricing Express Quote Service Service Orientation 30-Year Database Complex Rating Scheme Liquid Investment Portfolio Educate Independent Agents Hire Only Non-Insurance Personnel 14,000 Customized Prices Make Profits on Premiums Steep Incentives to Make 4% Profits 17

18 WHAT MANAGEMENT SYSTEMS ARE REQUIRED? 18 Four Seasons Hotel, Silicon Valley

19 NESTED CHOICE CASCADES Corporate Level Cascade Winning Aspiration Where to Play Strategic Group Cascade Individual Business Cascade Winning Aspiration Winning Aspiration Where to Play Where to Play How to Win How to Win Capabilities Capabilities Management Systems How to Win Management Systems Capabilities Management Systems 19

20 REINFORCING CHOICES 20 Image courtesy of P&G

21 OLAY STRATEGY CHOICES CIRCA 1995 What is our winning aspiration? Low-price skin-care products (cleanser, moisturizer, beauty bar, body wash) Customers in the 50+ segment Sold through discount retailers, grocery and drug stores To play in the global skin-care category To turn from a shrinking position to a growing one, improving from $750 million in sales Where will we play? How will we win? Leverage scale behind an array of products, widely available Classic brand positioning What capabilities must we have? Product-based innovation Strong retail relationships What management systems are required? Measures of market share, in-store presence, in-stock positions Product R&D systems 21

22 OLAY STRATEGY CHOICES What is our winning aspiration? Sell through mass channels (best customers) Younger women just noticing the first signs of aging Win convincingly in skin-care segment (market leadership) Build a pillar for the beauty-care business Where will we play? How will we win? Move upmarket in product, price and promotion Establish masstige channel presence What capabilities must we have? Innovation (product, distribution, packaging) Consumer understanding Go-to-market approaches Partnering What management systems are required? Partnering systems Channel and consumer metrics 22

23 A NEW OLAY ACTIVITY SYSTEM Engage and Inspire Olay Team Communicate Powerfully and Effectively Brandbuilding framework Advertising Consumerdriven measurement systems Design In-store Marketing Deep Consumer Understanding Consumer Research User Co-Creation Sessions Scale Customer Relationship Management Innovation Sell Where She Wants to Buy us Distribution Management Shopper Marketing Packaging Technology Compound R&D Connect + Develop 23

24 THANK YOU Check out the PTW