Gain market share – simply

Gain market share – simply

Develop a capabilities driven strategy focusing on what you do, not what you make or sell. That’s according to Paul Leinwand, co-author of a recently published book The Essential Advantage: How to Win With a Capabilities-Driven Strategy.

“Good strategy, good value creation, is based on what you do really well and then matching that up with a very good market-backed view of where those capabilities are going to create value,” explains Leinwand.

Too often companies define themselves by what they make and not by what they do. In a volatile or shifting market, that can be disastrous. Take the case of Polaroid. “The company made the mistake of defining themselves in instant film,” says Leinwand. “And as the instant film market went away,” he says, “so did Polaroid.”

Instead, in order to ensure long-term success, companies should decide what exactly it is that they do best. These capabilities should either set them apart from competitors, or be superior to those of their main rivals.

It’s not about quantity, but quality, stresses Leinwand, adding that the ideal number is three to six capabilities, tops. Once capabilities are determined, the next step is aligning the right capabilities with the right market. That’s what Leinwand calls the “right to play.” In other words, a company is prepared to participate, or play, in a market. It’s like having the right rules for the right game. “You could be great at capabilities in a market that doesn’t value those capabilities. That will certainly be a recipe for failure,” affirms Leinwand.

In addition to the “right to play,” there is another element crucial to achieving success. It’s called the “right to win.” According to Leinwand, that’s “the ability to know that you have what it takes to really satisfy the customers in that market and beat the competitors that are facing you.”

It sounds simple – and it is.

What do you and your company do best?