Where Will We Play? Strategic Market Selection in Product Strategy
The Second Strategic Question
In Playing to Win, A.G. Lafley and Roger L. Martin identify "Where will we play?" as the second critical question in strategic planning. This question requires organizations to make explicit choices about the markets, customer segments, channels, and geographies where they will compete.
Why Market Selection Matters
As Lafley and Martin explain, you cannot win everywhere. Making explicit choices about where to compete allows organizations to focus their resources, develop deep market knowledge, and build sustainable competitive advantages in chosen markets.
Dimensions of "Where to Play"
1. Customer Segments
Which customer segments will you target? This requires understanding customer needs, behaviors, and willingness to pay. Lafley and Martin emphasize the importance of choosing segments where you can win, not just where there is opportunity.
2. Product Categories
What products or services will you offer? This choice should align with your capabilities and where you can create unique value.
3. Geographic Markets
Which geographic markets will you enter? Consider factors like market size, competition, regulatory environment, and your ability to serve these markets effectively.
4. Channels
Through which channels will you reach customers? This includes direct sales, online platforms, retail partnerships, or distribution networks.
5. Vertical Integration
What parts of the value chain will you participate in? Will you manufacture, distribute, or provide services directly?
Examples from Playing to Win
Olay's Market Selection
Olay chose to focus on the skincare category rather than the broader beauty market, targeting women aged 25-55 who were concerned about aging. This focused choice allowed Olay to develop deep expertise and win in this specific segment.
Bounty's Channel Strategy
Bounty chose to focus on retail channels where consumers make paper towel purchases, emphasizing product placement and in-store marketing to drive sales.
Application in Product Development
For Product Managers
Product managers must make explicit choices about:
- Which user personas to target
- Which use cases to prioritize
- Which platforms to support (web, mobile, desktop)
- Which markets to enter first
For Engineering Teams
Engineering teams make "where to play" choices when deciding:
- Which technology stacks to adopt
- Which platforms to support
- Which markets to prioritize for performance optimization
- Which integration partners to support
The Power of Focus
Lafley and Martin emphasize that choosing where to play is about focus, not expansion. By saying "no" to some markets, you can say "yes" to winning in chosen markets. This focus enables:
- Better resource allocation
- Deeper market understanding
- Stronger competitive positioning
- More effective marketing and sales
Common Mistakes
- Trying to Serve Everyone: Failing to make explicit choices about target markets
- Following Trends: Entering markets just because they're popular, not because you can win
- Ignoring Constraints: Choosing markets that don't align with your capabilities
- Lack of Focus: Spreading resources too thin across too many markets
Best Practices
- Make explicit choices about where to compete
- Choose markets where you can win, not just where opportunity exists
- Consider your capabilities when selecting markets
- Be willing to say no to attractive but non-strategic opportunities
- Regularly review and refine your market choices
Conclusion
The question "Where will we play?" forces organizations to make explicit choices about market focus. As Lafley and Martin demonstrate in Playing to Win, these choices are fundamental to developing winning strategies. By focusing on markets where you can win, rather than trying to compete everywhere, organizations can allocate resources more effectively and build sustainable competitive advantages.
Reference
Lafley, A.G., & Martin, R.L. (2013). Playing to Win: How Strategy Really Works. Harvard Business Review Press.