Lafley & Martin talk a lot about “how to win” in their new book, “Playing to Win”. It is the third strategic challenge after you have figured out already what is winning and where you want to play. I read this chapter through a few times and I was still scratching my head a bit.
The basic idea is simple. When you go to market, you either compete on price or quality. You are either cheaper or better. Sometimes you can be both for a while, but as you develop your product, sooner or later, you will have to choose which direction you go. So far so good. I got that part.
And I got the cost cutting idea too. That is not my cup of tea, but it is not too hard to visualize how management might try to squeeze costs out of a production system. I got that part too.
But the quality thing is confusing. It is confusing because the idea of “quality” itself is confusing. Not because I don’t see quality. As Jobs said, i am as good as the next guy when sensing something is “insanely great”. But how to you get there? There’s the rub.
One way is through synergy. Apply what you do well already in an adjacent space. So Proctor & Gamble bought a fragrance company and plugged its new fragrance creating know how into its home product development. That differentiated the product lines from the other stuff on the shelf that did not produce nice smells.
Today I see another example. No one could figure out why Jeff Bezos bought the Washington Post. Amazon buying a newspaper? Jeff, in his typical style, played his cards close to his chest. He said he got talked into it. Bull feathers. He did it for a reason. But what reason? Now we begin to see. Jeff announced that he will begin to offer free Post access to folks on a national basis who subscribe to other local newspapers. Hmmm … why?
Here is why, from Giga
… the free digital subscriptions could be expanded to include not just other newspapers or traditional media companies but “any company that sells premium subscriptions” for a product or service — including (not surprisingly) Amazon’s Prime delivery program, as well as the Spotify music streaming service and even pay-television providers.
jeff is looking ten years down the road and asking how people will want to access news. His bet is that they will do it through a package or bundle of other stuff. And Jeff is starting to create bundling.
See the synergy?