Strategy.

The framework

1. 01

   Choose where to play — and define it by what you exclude.

   The where-to-play choice runs across five dimensions: which customer segments, which geographies, which product categories, which channels, and which stages of the value chain. Write your answer for each, then apply the only test that matters: does each choice name something you are giving up? A where-to-play that excludes nothing real is not a choice; it is a description of the market. And the exclusions must sting slightly — walking away from customers you could never have won costs nothing and decides nothing. The field you choose should be one where your capabilities count for more than the competition's, which usually means narrower than ambition wants.

2. 02

   Name how you win on that field — one advantage, stated against real competitors.

   How to win is the specific reason a buyer on your chosen field picks you over the alternatives actually present there — and Lafley and Martin allow only two broad routes: win on cost, or win on differentiation. Trying to hold both by default is how companies end up with neither. The choice must be stated competitively, not descriptively; 'great service' is not a how-to-win until you can complete the sentence 'on this field, buyers choose us over {named competitor} because {the advantage}'. And if the advantage would evaporate the moment a rival copied your current feature list, it isn't a how-to-win — it's a head start.

3. 03

   Test the pair as one decision — each should make the other stronger.

   Where to play and how to win are not sequential; they answer each other, and the strength of a strategy lives in the fit between them. A genuine advantage on the wrong field still loses — the best product in a segment that doesn't value it, the lowest cost in a channel that buys on relationship. So test them jointly: does this field reward this advantage more than any adjacent field would, and is this advantage the one these buyers actually pay for? When the pair doesn't fit, most teams change the how, because it feels like their side of the equation to fix. The braver and frequently correct move is changing the where.

4. 04

   Run the cascade down — capabilities and systems keep the choices honest.

   The last two choices stop the first three from being fiction: what capabilities must you have to win this way on this field, and what management systems — measures, processes, reviews — keep those capabilities sharp? Audit the required capabilities against what you actually have, and write the gap in plain terms: a skill to hire, a relationship to build, a cost structure to earn. Aspiration flows down the cascade, but feasibility flows back up — if the capabilities aren't buildable with the resources you have, the answer is not to try harder; it is to walk back up and choose a different field. Revisit the five as one piece whenever any one of them changes, because a cascade that no longer agrees with itself is a strategy in name only.