The strategy choice cascade. Where to play and how to win.

Category:The strategy choice cascade. Where to play and how to win.

Abstract

The Strategy Choice Cascade is a methodology that analyzes the critical elements of the strategic alternative of interests. Moreover, it is a way for a team to visualize and discuss different approaches towards future projects. The Strategy Choice Cascade was designed at Procter & Gamble and is discussed in A. G. Lafley and Roger L. Martin's book 'Play to Win: How Strategy Really Works.' A strong strategy will generate a durable advantage and higher value in the competitive market. This article serves as a guide for articulating a strategy or strategic possibility as an integrated collection of choices that uniquely places a company, project or product in its industry.

Mention how this is applicable to project managers. Mention that the article provides hands on guidance, the reader (at least prototypically) can apply the method after reading the article.

The strategy choice cascade

The value of framing your strategy

Strategy is an integrated collection of choices that generate a durable advantage and differentiate a project or company from the market competitors. Every facet of a business is affected by strategy, from employees to partnerships, services to sales channels, consumers to competitors.

Moreover, in project management, a well-defined strategy framework leads to designing milestones that align with the company's goals. Several strategy approaches and frameworks exist to assist managers in dealing with this level of complexity. A strategic framework is a tool that assists managers in portraying how a project meets corporate and customer goals in a systematic and organised way. Implementing a strategic framework in a project has a number of advantages. A strategy framework will set the pillars to future projects, managers will identify the market of interest, the differentiation plan as well as the management systems required. On the deliverables, managers will have the foundations of a project communication plan which will enable effective communication with employees, customers, and other stakeholders. The framework also requires thinking about project interconnections, which will help decide which initiatives are worthwhile today and which can be of more interest at a later time. This cascade is comprised of five key elements:

1. The winning aspiration. This phase is all about establishing what the project aims to achieve and what would make it successful. 
2. Where to play. The playing field on which the project will compete.
3. How to win. How to come out on top. Winning implies outperforming competitors in terms of the customer value equation. There are two approaches to achieve a competitive edge, becoming either a differentiator or a cost leader.
4. Capabilities. The set of activities that a management must complete in order to gain a competitive edge.
5. Management Systems. Metrics and Systems that facilitate the capabilities and choices that constitute the strategy.

Figure showing the 5 pillars of the strategy choice cascade.

Winning aspiration

The first item in the strategic decision-making process cascade regards the winning aspiration. In this step, management should define the strategic purpose of the company, including its driving goal and aspiration. It should convey what success would look like for a specific project and what it aims to achieve in terms of strategy. Defining a winning strategy serves as the basis for exploring the best alternatives and it sets the stage for all subsequent strategic decisions. An enterprise's guiding purpose is its aspirations. Consider Spotify's mission statement:" unlock the potential of human creativity—by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it. " This statement is an affirmation of what it aspires to be and a reminder of the reason it exists. Or Nordstom which vows "to give customers the most compelling shopping experience possible".

A company's mission statement can be conveyed in a variety of forms. However, it is recommended to be focussed on customers.  The objective of an organization, according to Peter Drucker, is to generate a client, and this is still valid today. Looking at the  mission statements previously discussed, both of them base their goals on the needs of their consumers. The  tone of those goals is also interesting to look at: Spotify aims to serve all artists and fans, not just a select few, while Nordstom wants to serve all shoppers. A corporation should strive to win with its clients, not merely provide for their needs. And according to the authors of Playing to Win, the most important aspect of a company's ambition is that it should compete to win.

Where to play

The company's operating sector is defined by its decision of where to play. The focus should be to identify  what type of market the project should target. It may be the same market the company has always known or maybe they are looking to explore a new segment. Its is a matter of deciding where it is recommended to compete and where to avoid competing in order to gain the best competitive advantage. Recognizing this decision is critical since the playing field selected for the project will also be the area where you must find strategies to win. Choices on where to play can be found in a variety of contexts. 

1. Geography. When analyzing this aspect, the management identifies in which parts of the world the project will compete in.
2. Customer: Analyse the customers targeted by the project from the perspective of demographic, psychographic, behavioral and geographic segmentation.
3. Channel. This study looks at the routes that a product follows from business to the client. They can be direct or indirect sales channels, depending on whether the business performs the transaction directly with the client or through intermediaries.
4. Offerings. Identifying the specific services offered to serve the consumer and win in this market.
5. Stakeholders of project stage. What stages will be completed by the business and with by external contractors.

How to Win

Winning for a project means providing a better customer value equation than competitors. Porter's core argument in his book "Competitive Strategy" is that organizations may gain and maintain a competitive edge in the marketplace by pursuing one of two strategies: 1) cost leadership or 2) differentiation.