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How does a Standard & Poors 500 company, one of the best-known consumer products companies in the world, make strategic decisions?

A.G. Lafley, former CEO of Procter & Gamble, together with his strategic advisor, Roger L. Martin, doubled P&Gs sales, quadrupled its profits, and increased its market value by more than $100 billion in just 10 years.

In Playing To Win, Lafley and Martin tell the story of how P&G made the decisions for P&G to survive and grow, putting ideas from Michael Porter's books, Competitive Strategy and Competitive Advantage, into action.

P&G focused on these key questions:

• What is our winning aspiration?
• Where will we play?
• How will we win?
• What capabilities must we have in place to win?
• What management systems are required to support our choices?

P&G had to integrate its strategic vision for many subsidiaries and iconic brands.

For example, P&G rejuvenated Oil of Olay, a flagging skin care brand, by appealing to a younger, mid-30s audience. Instead of going head-to-head with competing brands at major department stores, like Macys or Saks, P&G focused on its existing distribution network of drug stores. Instead of fighting existing wrinkles, the properties for avoiding getting wrinkles by fighting the "seven signs of aging" were emphasized. P&G focused on shifting consumer perception of the brand through its positioning, packaging, pricing and promotions.

After the 1990s, P&G reexamined its internal information technology (IT) structure. It had been handling it internally, and wasn't satisfied with the results. It considered hiring a business process outsourcer (BPO), which would provide IT services externally, for a fee. After exploring various options, the decision was made to outsource various general business services (GBS) activities to best-of breed BPO partners, including Hewlett-Packard for IT support and applications, IBM Global Services in employee services, and Jones Lang Lasalle for facilities management.

P&Gs Bounty (paper towels) brand was a North American market leader, known as "the quicker picker-upper." P&G tried to bring Bounty to the global market. In Europe, Asia, and Latin America, manufacturing overcapacity and private-label dominance turned the category into a commodity. In emerging markets, prices and willingness to pay were so low that brand differentiation gave little competitive advantage. P&G decided to abandon selling Bounty outside North America and focus on the market where it performed well.

Most business owners and leaders won't have the resources of Procter & Gamble. They should still be able to find valuable insights for their own strategic decision process in Playing To Win.

Buy it on Amazon: Playing to Win: How Strategy Really Works.

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