What other firms refuse to learn from Costco
The real key to customer centricity: people taking care of people

Why the strategies of Google, USAA and Vanguard have been so effective

When we decide how we want to compete, we have to look at how we're going to fit into the market, both from our customers' point of view, as well as from our internal capabilities. 

Harvard Business Review: Strategic Choices Need to Be Made Simultaneously, Not Sequentially, 2017-Apr-3 by Roger L. Martin

The only productive, intelligent way to generate possibilities for strategy choice is to consider matched pairs of Where to Play and How to Win choices. Generate a variety of pairs and then ask about each:

  • Can it be linked to an inspiring, attractive Winning Aspiration?
  • Do we currently have, or can we reasonably build, the capabilities that would be necessary to win where we would play?
  • Can we create the Management Systems that would need to be in place to support the building and maintenance of the necessary capabilities?

Those "Where to Play" and "How to Win" possibilities for which these questions can plausibly be answered in the affirmative should be taken forward for more consideration and exploration. For the great success stories of our time, the tight match of Where to Play and How to Win is immediately obvious.

  • USAA sells insurance only to military personnel, veterans, and their families — and tailors its offerings brilliantly and tightly to the needs of those in that sphere, so much so that its customer satisfaction scores are off the charts.
  • Vanguard sells index mutual funds/ETFs to customers who don’t believe that active management is helpful to the performance of their investments. With that tight Where to Play, it can win by working to achieve the lowest cost position in the business.
  • Google wins by organizing the world’s information, but to do that it has to play across the broadest swath of search.

It doesn’t matter whether the strategic question is to aim broadly or narrowly, or to pursue low costs or differentiation. What does matter is that the answers are a perfectly matched pair.

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