Essential Questions for Strategic Planning

Trying to succeed everywhere and with all customers sets companies up for failure. Lafley and Martin advise identifying your strengths both internally and in your customer base. Make tough decisions that lead to significant successes.

• Ask "What is our main goal?" Define your firm's ultimate aim and vision.
• Ask "Where will we focus?" Determine your target markets, distribution channels, and key areas of competition.
• Ask "How can we succeed?" Plan how to create unique value and deliver it effectively.
• Ask "What skills do we need?" Assess your core strengths and areas needing improvement.
• Ask "What systems do we need?" Develop processes to support, implement, and evaluate your strategy.

Refine Your Approach
To support their strategic questions, the authors use informative case studies, often focusing on P&G product lines like Olay.
In the late 1990s, skincare made up a quarter of beauty sales. P&G's Oil of Olay, often mocked as "Oil of Old Lady," brought in $800 million annually but seemed outdated compared to the booming $50 billion US skincare market. 

P&G had choices: rebrand Oil of Olay, acquire a respected brand, or expand an existing product like Cover Girl into skincare. Each option had risks and potential rewards, but the path forward was uncertain. Restructuring offered no guarantees. Success or failure rested solely on those leading the effort. Olay's widespread product recognition was the main reason to consider restructuring its marketing strategy.

P&G Revamps Olay to Capture Young Women Market
Procter & Gamble identified a new consumer group: women in their mid-30s who were starting to worry about wrinkles. Research showed that once these women liked a product, they tended to remain loyal customers. Seeing an opportunity, P&G leaders like Lafley and Martin decided to overhaul their brand Oil of Olay. 

They renamed it simply "Olay," revamped the product itself, updated the models used in advertisements, and refreshed their marketing strategies. This transformation was aimed at creating strong brand loyalty among their target demographic. Additionally, P&G expanded Olay's product lines to appeal to high-end retailers, further solidifying its position in the skincare market.

Use your influence.
Prestige products appeal to both mass market and high-end buyers. Introducing "masstige," blending mass market and prestige, gives everyday buyers a high-end brand that meets their needs. This helps luxury shoppers recognize quality and shows everyday buyers they can afford a touch of luxury. P&G introduced a new masstige category with the $18.99 Olay Total Effects.

The internal price debate at P&G regarding their new masstige product launch was crucial. Some voices within P&G found $12.99 too low and $18.99 too high. The price of $15.99 fell into a "no man's land"”it was too expensive for mass shoppers and not prestigious enough for high-end buyers. Ultimately, $18.99 proved to be the optimal price point. It appealed to both mid-market consumers looking for a higher-end option and high-end consumers seeking a more accessible product. P&G later expanded this strategy by introducing the luxurious $50 Olay Pro-X product line.
From Steady Growth to Billion-Dollar Success

During the 1990s, P&G's skincare sales grew steadily at a rate of 2% to 4% annually. However, following a strategic re-launch in the 2000s, the growth accelerated dramatically, reaching double-digit figures in both sales and profits. This transformation propelled Olay into a $2.5 billion brand, characterized by high profitability and a focused approach to lucrative market segments.

Track your achievements.
Initially, Olay aimed to lead the North American market and achieve strong global sales, particularly among women aged 30 to 40. Their masstige strategy effectively broadened their consumer base. The focus on developing skincare products that visibly improved facial skin, coupled with a memorable advertising campaign, enhanced Olay's brand appeal. Leveraging strengths in packaging, distribution, marketing, and innovative business models drove Olay's growth. Effective global management systems ensured operational efficiency and supported strategic objectives in a competitive market landscape.

P&G took an extra step by leveraging an existing product and linking new products to it. Management supported this by helping employees feel connected to Olay and tracking how customers reacted to the brand, packaging, and marketing.

œStrategy logic flow.

This model offers a practical way to evaluate strategies. Begin by analyzing your industry, understanding client priorities, and assessing your competitive position. Predict how competitors will react to your moves. Unlike many other strategies, this approach is clear and directly applicable in the real world. Even small businesses can benefit from these principles.

To apply their wisdom effectively, the authors advise reverse-engineering your strategic choices. "Frame" your options clearly to spot feasible paths. "Generate strategic possibilities" to add more choices. Define conditions for each feasible option. Analyze obstacles. Conduct thorough testing, assess each option, and make decisions. Remember, strategy is a continuous process, not just a result. Be prepared to adapt as conditions change”research, plan, and analyze thoroughly throughout.