Playing to Win

"Strategy is about making choices; making specific choices to win in the marketplace." – A. G. Lafley. But how do these choices guide a business from failure to success?

1. Strategy Begins With a Winning Aspiration

Business success starts with clarity on what you want to achieve. A winning aspiration isn't just about profits – it's about setting a future vision that transforms your business and inspires your team.

Olay's strategy hinged on redefining its aspiration. From being labeled "Oil of Old Lady," the brand shifted its goal to become a leader in the skincare market by blending the qualities of luxury brands with accessibility. Instead of merely surviving, it aimed to dominate with innovation and value. This clear focus laid a strong foundation.

By setting the target to become a $1 billion brand while carving out the "masstige" segment – a middle ground between mass and prestige – Olay painted a compelling picture of its future. Everyone involved, from management to product developers, aligned their efforts to achieve this vision, ensuring every move supported the overarching goal.

Examples

• Olay aspired to lead the skincare market in North America with products that appealed to modern, sophisticated women.
• The ambition included global expansion, indicating a broader, transformative goal.
• Their focus on balanced pricing ($18.99) reflected a clear aspiration to provide quality without alienating mass-market consumers.

2. Deciding Where to Play Defines Your Market

Choosing your battlefield, or "where to play," decides where you'll focus your efforts and how to reach the right consumers. It's about understanding the segments you're targeting.

Olay identified women aged 35 and older beginning to notice signs of aging. This group valued long-term results and quality, even if it required spending slightly more. By defining and honing in on this audience, Olay tailored everything – from product design to marketing messages – to resonate with these women.

Choosing the "masstige" segment also gave Olay clear market positioning. Selling prestige-quality skincare at mass-market retail locations created an entirely new category. This distinction ensured that Olay stood out from competitors in both the luxury and drugstore categories.

Examples

• By focusing on first signs of aging, Olay narrowed its audience to women seeking anti-aging solutions.
• Offering premium products in mass-market retail stores expanded their reach without losing accessibility.
• Clear branding and pricing served as signals to consumers about both the product's efficacy and affordability.

3. Winning Requires Differentiation

Once you've identified your market, the next step is figuring out how to outperform competitors. Winning isn't about doing what others do – it's about doing what others can't.

Olay developed products with a blend of advanced ingredients typically associated with luxury brands while maintaining affordability. Total Effects, for example, addressed not just wrinkles but multiple signs of aging in one product – a feature that few competitors had matched at the time.

The choice to elevate packaging, reinvent branding, and increase the price tag ($18.99) reinforced differentiation. The improved image presented Olay as a sophisticated option. By investing in science and design, Olay created a strong identity that consumers trusted and desired.

Examples

• The Total Effects product highlighted multiple anti-aging benefits, giving it a competitive edge.
• Premium-feel packaging and pricing signaled value, pushing consumer perception beyond "cheap drugstore cream."
• Marketing campaigns focused on elegance and results, targeting women eager for effective yet affordable skincare.

4. Capabilities Bring Strategy to Life

Even the best strategy won't succeed without the right set of skills, tools, and systems. The practical execution of ideas often determines success.

For Olay, capabilities meant harnessing innovation by partnering with experts. They worked with top-notch scientists for cutting-edge ingredients, ensuring their products met their promises. Designers revamped Olay's packaging to reflect elegance and sophistication, appealing directly to the intended market.

These capabilities weren't limited to internal teams. Olay collaborated with savvy advertisers who understood how to connect emotionally with their audience, ensuring that every element – from the ad copy to the visuals – aligned with the brand's new image.

Examples

• Scientists helped develop Total Effects with breakthrough ingredients like vitamins and antioxidants.
• The new sleek, modern packaging hinted at premium skincare while maintaining mass appeal.
• Marketing campaigns painted Olay as a trusted, effective solution, seamlessly aligning messaging with their product.

5. Management Systems Enable Cohesion

Strategies often fail due to poor execution. Management systems, which keep all departments aligned with the overarching vision, can make or break execution.

For Olay, the transformation required cross-department collaboration. Teams from R&D, design, marketing, and supply chain had to move together toward shared goals. Consistent communication and management oversight ensured everyone focused on serving the target audience effectively.

These systems are not stagnant. Olay used feedback from their sales and marketing teams to refine their strategy, ensuring that it stayed relevant as market dynamics evolved.

Examples

• Regular coordination meetings ensured that marketing, design, and product development supported the brand’s new image.
• Sales and market data were continuously analyzed to guide marketing and development strategies in real-time.
• Adaptable systems allowed Olay to pivot quickly when market needs shifted.

6. Pricing Reflects Perceived Value

People associate price with quality, and adjusting pricing can reshape consumer perception significantly. Olay transitioned from a low-price option to a premium product aimed at discerning buyers.

Selling Total Effects at $18.99, a far cry from their previous $3.99 tags, conveyed improved quality. While more expensive than other mass-market competitors, it was still affordable compared to luxury skincare. This balance reinforced Olay's positioning in the "masstige" category.

The pricing strategy also supported loyalty. Once consumers experienced the benefits of Total Effects and embraced its value, they were more willing to pay a higher price for perceived improvements in quality.

Examples

• The significant price jump reflected Olay's ambition to rival luxury skincare brands while staying accessible.
• Customer loyalty surveys revealed confidence in the value delivered by Total Effects.
• Sales data showed women were willing to spend more for a multi-benefit product that reduced complexity.

7. Packaging is a Silent Salesman

The way a product looks can deeply influence consumer perception. Olay transitioned from plastic bottles resembling basic creams to sophisticated designs that exuded elegance.

The modern packaging not only served an aesthetic purpose but also communicated Olay's commitment to quality. When placed on retail shelves, the product stood out visually, catching the attention of their targeted audience.

This redesign reinforced each element of their strategy. Customers drawn to the packaging often assumed the product would outperform competitors before even testing it, showcasing the correlation of design with perceived value.

Examples

• Elegant glass-like bottles illustrated the skincare's prestige-inspired quality.
• Bright, clean designs conveyed a sense of trust and scientific efficacy.
• Retail analysts noted that updated packaging appealed to both new and returning customers.

8. Strategy is Iterative, Not Fixed

A good strategy evolves over time. Olay didn’t stop refining its decisions even after its initial success. Feedback loops allowed the company to adapt to the ever-shifting beauty market.

For instance, as new competitors entered the masstige space, Olay doubled down on innovation, introducing updates to the Total Effects formula. They consistently monitored customer reviews and sales data, ensuring they stayed ahead of their rivals.

This iterative mindset ensured not just survival but continuous growth, keeping Olay relevant for decades.

Examples

• Total Effects launched new variants incorporating customer feedback on additional skin concerns over time.
• Partnerships with scientists allowed research into innovative skincare trends.
• Olay adapted promotional strategies to incorporate social media as platforms like Instagram became prominent.

9. Strategy Aligns With Larger Corporate Goals

A strategy should resonate both at the brand level and within the overall company it operates within. Olay's decisions mirrored and reinforced P&G's overarching goals for the beauty sector.

By focusing on innovation, growth, and market leadership, Olay strengthened P&G's portfolio. This alignment made it easier for the brand to secure resources, research backing, and marketing support from P&G.

Olay’s transformation mirrored P&G's corporate approach, creating a mutually beneficial relationship.

Examples

• P&G's adoption of innovation culture provided Olay with scientific resources.
• The synergy between Olay's mid-tier positioning and other P&G brands ensured no product cannibalization.
• Corporate leadership support enabled Olay's global expansion.

Takeaways

1. Define your winning aspiration to set a clear direction for your business or project.
2. Focus on differentiation by offering unique solutions that stand out in your market.
3. Use feedback and adapt strategies to stay responsive to changing dynamics.