The Complete Strategy Playbook: Combining Competitive Analysis with Strategic Choice
Strategy development becomes clearer and more powerful when you combine competitive analysis with structured decision-making. By merging Porter's insights about competition with Lafley/Martin's practical framework, organizations can create strategies that are both distinctive and actionable.
Phase 1: Understanding Your Competitive Environment
Before making strategic choices, you need to understand where you're competing. Porter's five forces provide this crucial context:
Analyze Your Competitive Landscape
Who are your direct competitors?
What new players might enter?
How much power do suppliers have?
How much power do customers have?
What substitutes threaten your business?
Identify Profit Potential
Where does money get made in your industry?
Which players capture the most value?
What drives profitability in your market?
Where are the opportunities for advantage?
Phase 2: Making Strategic Choices
With this competitive understanding, use Lafley/Martin's questions to make clear choices:
1. Define What Winning Means
Set specific competitive goals
Make winning measurable
Focus on market leadership
Think beyond financial metrics
Don't say: "To be the best healthcare provider" Do say: "To lead in patient outcomes and satisfaction in our core services while maintaining top-quartile financial performance"
2. Choose Where to Play
Your competitive analysis helps inform these choices:
Which customer segments offer opportunity?
Which geographic markets make sense?
Which products/services can you win with?
Which channels will you use?
Remember Porter's advice: Don't try to be everything to everyone. Make clear trade-offs.
3. Determine How to Win
Porter's positioning strategies guide this choice:
Will you win through lower costs?
Will you win through differentiation?
Will you focus on a specific niche?
Your choice must:
Match your where-to-play decisions
Create real competitive advantage
Be sustainable over time
Involve clear trade-offs
4. Build Required Capabilities
Identify and develop the abilities needed to:
Execute your chosen strategy
Create competitive advantage
Support your positioning
Reinforce each other
5. Create Supporting Systems
Develop management systems that:
Measure strategic success
Allocate resources effectively
Align organizational structure
Reinforce strategic choices
Making It All Work Together
The power of this combined approach comes from:
Strategic Fit
Every choice reinforces others
Activities work together
Systems support strategy
Capabilities enable advantage
Clear Trade-offs
Explicit choices about what not to do
Focus on chosen positions
Resistance to compromise
Protection from imitation
Continuous Alignment
Regular review of competitive environment
Ongoing assessment of strategic choices
Adjustment of capabilities and systems
Maintenance of strategic focus
Implementation Keys
To make this combined approach work:
Start with Competition
Understand your industry thoroughly
Know where profit potential lies
Identify competitive advantages
See strategic opportunities
Make Clear Choices
Use the five questions structure
Make explicit trade-offs
Choose distinctive positions
Build reinforcing activities
Build Support Systems
Develop needed capabilities
Create measurement systems
Align organizational structure
Establish review processes
Maintain Strategic Discipline
Resist operational distractions
Stick to chosen positions
Keep trade-offs clear
Focus on competitive advantage
The Leadership Challenge
Leaders must:
Keep competitive context in mind
Make and maintain clear choices
Ensure strategic fit
Resist compromise
Drive consistent execution
Remember
Good strategy combines:
Deep competitive understanding
Clear strategic choices
Distinctive positioning
Reinforcing activities
Supporting systems
The goal is creating sustainable competitive advantage through positions and choices that are both distinctive and difficult to imitate.
