Lafley and Martin’s Five-Step Strategy Model

To succeed in business – no matter what business you are in – you are going to need a great strategy. If you look around, you are certainly going to see that you have competition in the market, but that’s okay. You don’t have to be the only business in your market in order to succeed – you just have to be the best.

Lafley and Martin’s Five-Step Strategy Model

Where most people think that they need to have the best product or service in the world in order to win, success in business is actually as much about strategy as it is about the actual product that is being sold. Of course, it helps to have a great product, but you need an excellent strategy to match.

If you would like to develop a winning strategy for your own business, consider using Lafley and Martin’s Five-Step Strategy Model. This is a relatively new model which was published in a 2013 book, making it one of the most-modern strategy models in business. By working through the five steps that are included in this model, you should emerge with a clear concept of how your business is going to be run from this day forward.

1) What Is Our Winning Aspiration?

Quite simply, this is the goal of the organization. Of course, it should be a bit more specific than just stating that you would like to ‘make money’. All for-profit businesses want to make money, so that doesn’t really help you get anywhere. What it is that you are going to do in order to make that money? Are you trying to dominate a specific market, or are you just looking for a piece of a big market? It is important to be specific even at this top level, as your answers to this question will influence decisions you make later on.

The best way to think about this question is to picture what success would look like in the future. If your organization is being successful five years from now, what would that look like? You should be optimistic, but realistic at the same time. For instance, if you sell some form of technology, you likely aren’t going to topple the major players in the tech game, but that doesn’t mean you can’t hit your own marks for success.

2) Where Will We Play?

Once you know what it will look like to win, you then need to decide exactly where you are going to ‘play’ in order to achieve that victory. This question demands that you identify both the markets and the customers that you are going to pursue. For some businesses, such as those that sell directly to consumers, the answers to this question will be easy. For example, if you produce a small product that is easy to ship, and you are selling direct to consumers, you will likely set up a website in addition to selling on other established e-commerce sites. However, for businesses that are going to sell to distributors or other intermediaries, identifying specific markets may take a bit more time and effort.

3) How Will We Win?

Now that you know where you are going to be competing in the market, the next step to deal with is the strategy that you are going to use to make sure you come out on top. You are going to face competition in whatever slice of the market you have decided to enter, so you will need to think long and hard about how you can position your product or service to stand out from the rest. If you take this step for granted, you will likely find that your competition remains a step ahead for years to come.

How Will We Win?

You don’t necessarily have to have a complex strategy in place at this level to come out on top – but it does need to be a good strategy that has a real chance to succeed. You could plan on winning the market based on lower cost, higher quality, faster turnaround times, or some combination of those three. Business is very simple when you boil it down to the basic level – consumers want good products and services for fair prices. Focus on those tenets and you will be headed in the right direction.

4) What Capabilities Must We Have in Place to Win?

This is the infrastructure that supports the plans you have developed. In order to enter the selected markets, and win in those markets, you will need a specific set of capabilities in place within your organization. What are you going to need to do in order to meet your goals at higher strategy levels?

What Capabilities Must We Have in Place to Win?

For instance, if you have decided that you are going to win through offering lower prices, what capabilities to do you need in order to be able to sell your goods at a low price point? Without the capabilities necessary to meet your higher-level goals, the organization is destined to fail.

5) What Management Systems Are Required to Support Our Choices?

All organizations are driven forward by people, even if there is plenty of technology in place within the company as well. Without good people working toward a common goal, everything else that you have done to this point will be wasted. This final step of the strategy process demands that you take the time and effort to build management teams which will be able to support the organizational goals and strategies that have been put into place.

There is a lot to learn from using this model within your own organization, as it can help you to quickly create a top-down set of strategies that will keep your business moving in the proper direction for months and (hopefully) years to come. Businesses without specifically-outlined strategies tend to ‘float around’ until they are eventually knocked out by superior competition. Don’t let that happen to you. Use this five-step process to clearly define all of your strategies and look forward to a long and prosperous future.

Key Points

  • Lafley and Martin’s Five-Step Strategy Model was published in a 2013 book, making it one of the most-modern strategy models in business.
  • What should be the winning aspiration? Organizations should define exactly what winning means to them.
  • Where you are going to play? Organizations can choose where to play in terms of services and product lines.
  • How you are going to win? In order to make the above decisions work, they have to be supported by the things that an organization can do better than the competition.
  • What capabilities you should build? The organization should look at its strong points and core competencies and tailor them to support the first three points.
  • What management systems are needed? The organzation must decide who they need, what they need, how they will deliver, and how they can tell whether the strategy is succeeding or not.

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