How to Win is the third question in the Strategic Choice Cascade of the Playing-to-Win framework: How do we win in the chosen markets? After Where to Play has defined where the company intends to be active, the focus shifts to determining the type of competitive advantage. At its core, there are two fundamental strategies: differentiation (being unique and commanding a price premium) or cost leadership (the lowest-cost offering at acceptable quality).
Walmart wins through consistent cost leadership: every process is designed for minimal unit costs, from supply chain to store layout to staffing model. Apple wins through differentiation: design, ecosystem, and brand experience justify significantly higher prices. Both strategies are valid, but mixing them is dangerous. Porter called this position “stuck in the middle”: neither cheap enough to win price-sensitive customers nor differentiated enough to justify a premium. The How-to-Win decision must be consistent with Where to Play and the subsequent Capabilities.
The concept comes from the Playing-to-Win framework by Lafley and Martin and builds on Michael Porter’s competitive strategies. The most common trap is the attempt to win simultaneously through cost and differentiation across all segments.
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