Strategy FormulationCraft a Well-Thought Business Strategy via Lafley and Martin’s FIVE-STEP STRATEGY MODEL

The Five-Step Strategy Model, developed by A.G. Lafley, and Roger Martin, is a step-by-step strategic planning tool.

Main Benefits of FIVE-STEP STRATEGY MODEL

FIVE-STEP STRATEGY MODEL helps you:

• Build a coherent strategy
• Focus on the most critical aspects of strategic planning
• Clarify your thoughts with its question-based structure.

Explanation of FIVE-STEP STRATEGY MODEL

Regardless of your industry, you will need a solid strategy to succeed. Winning does not require the best product or service; it requires a consistent plan that matches your constraints.

Lafley and Martin’s Five-Step Strategy Model leads you towards developing your winning strategy. Working through the five steps included in this model should give you a clear idea of how your business will be run from here on out.

1. What is our winning aspiration?

Your winning aspiration is your goal or purpose to solidify success.

2. Where will we play?

This is the market in which you will reach your winning aspiration and in which you will compete. Think about customer segments, channels, categories, geographies, etc., to determine where to play.

3. How will we win?

This is the competitive strategy that will differentiate your brand/organization. Start from your brand’s value propositions (points of parity), continue with competitive advantages, and decide your unique selling proposition (point of differentiation).

4. What capabilities must be in place?

To deliver the values you defined in Step 3 better than your competitors, you must do something better. What are those things?

5. What management systems are required?

Systems are organizational structures, performance measures, and tools to maximize your capabilities.

How to Apply FIVE-STEP STRATEGY MODEL?

1. Determine your winning aspiration. To determine a complete winning aspiration, you can use Soar Analysis.
2. Identify the market in which you will play. To understand the market better and select your consumer, product, or distribution channel, following models can be resourceful: Break-even Analysis, Market Life Cycle, Buyer Persona, How to Create New Markets, Porter’s Five Forces, Ansoff Matrix.
3. Define the value proposition to win. Create your superior value to differentiate from your competitors. Have a look at Kotler’s 4Ps of Marketing, The Five Product Levels, Keller’s Brand Equity Pyramid, Unique Selling Proposition, Perceptual Mapping, VRIO Framework, TOWS Analysis.
4. Describe the capabilities that you need. Use D’Aveni’s 7S Framework, Four Hurdles to Strategy Execution to find the compatible set of skills that help you execute your strategy.
5. Decide the management systems that will enable you. To understand the needs of internal parties, you can run an internal Empathy Mapping.

Additional Tips and Readings

As alternative models for Five-Step Strategy Model, you can also read:

• 7 Strategy Question to implement your strategy successfully,
• Sequence of Blue Ocean Strategy to understand how to apply Blue Ocean Framework,
• Business Model Canvas to visualize every critical aspect of your business on one page.

Contact us to simplify and sharpen your strategic plan.