I challenge your GTM Strategy Vol.3 What makes a ?capability to build? choice ?strategic?? Is yours so?

Looking at what is going on in the market place with sustainably winning and challenger/follower players of the consumer products industry and seeing "strategic choices of focus", "winning actions vs. competition" and "building right capabilities" making the difference between them I decided to write a series of articles about how to make your organisation to be better positioned to sustainably win in the market place with a robust GTM strategy adding also links to related articles I wrote before. Knowing everyone directly or indirectly (meaning a set of unwritten heritage choices and actions) having already a GTM strategy, I decided to challenge the status-quo with naming the series " I challenge your GTM strategy". Here is the third challenge area.

What makes a ?capability to build? choice ?strategic?? Is yours so ?

When selecting strategic capabilities to build for your GTM strategy, it's crucial to align them with your overall corporate strategy and the specific competitive advantages you seek to establish. Here are steps to guide your decision-making process:

1. Understand Your Value Proposition (link to Right-to-win ): Start by understanding your unique value proposition and how you plan to compete in the market. Identify the areas in which you aim to differentiate your products, services, or customer experience from competitors.

2. Analyze Competitive Advantage (Link to Where-to-play ): Conduct a thorough analysis of your industry and competitors to identify the areas where you can potentially gain a competitive advantage. This could involve assessing market trends, customer needs, and the strengths and weaknesses of your competitors.

3. Assess Core Competencies (Link to How to win ): Evaluate your organization's existing core competencies and strengths to determine which capabilities could be leveraged to create a sustainable competitive advantage. This could include areas such as technological expertise, innovation, operational efficiency, or customer service excellence.

4. Prioritize Strategic Capabilities: Prioritize strategic capabilities that align with your chosen "where to play" (WTP) and "how to win" (HTW) decisions. These capabilities should directly support your chosen market positions and competitive strategies.

5. Consider Resource Allocation: Evaluate the resource requirements of each potential strategic capability. Consider factors such as investment needs, technology infrastructure, talent development, and time to market. Choose capabilities that are feasible to develop within your resource constraints.

6. Long-Term Viability: Assess the long-term viability of each strategic capability. Consider how sustainable and difficult to imitate each capability is, and how it will contribute to maintaining your competitive advantage over time.

7. Flexibility and Adaptability: Select strategic capabilities that are adaptable and flexible to changes in the business environment. A capability that can evolve with market dynamics and technological advancements is essential for long-term success.

8. Measure Impact: Define clear metrics and KPIs to measure the impact of each strategic capability on your business performance. This will help in evaluating their effectiveness and provide guidance for future strategic decisions.

Ie.

-?????? % Addressable market / Total market?

-?????? # Defendable Superiority claims?

-?????? % Equity share / brand?

-?????? % Share of voice /medium?

-?????? Results in Social listening?

-?????? HHP: Penetration, frequency, transaction size?

-?????? Nielsen in-store data

-?????? E-commerce analytics

-?????? Retailer service level reports

-?????? HR internal and external surveys

As there is no bad capability so to say, except for inaction to build one when strategic, let me give you a good example of a strategic capability from Frito-lay.

Frito Lay’s Shelf Displays (DSD) system is a capability central to its competitive advantage. DSD is case system in which the product is delivered to the store itself (often a convenience store) and placed on the shelf by the delivery guy, who also takes back and accounts for stales. It is an extra cost element in cost to serve in both manufacturing and delivery. It is labor-intensive and each stop is expensive.

So why Frito-lay made this ? Snack business is a numeric distribution business where you need to cover a big universe of stores with efficiency in terms of call quality (replenishment, visibility, new sales etc.) per man-hour. Frito-lay created this capability not because it is only needed to make the store deliveries efficient because it is the only player who can make it at scale and with minimum cost.

Frito Lay has by far the largest selection of salty snack brands (plus some sweet snack ones too): Lays, Doritos, Cheetos, Ruffles, Fritos and so on. The resulting economies of scale for each DSD truck stop creates a massive cost advantage for Frito Lay that the competitors can’t come close to matching.

Plus, it creates a convenience advantage for the store owner which he will ask from other suppliers. And when they comply with this trade demand they will incur higher cost-to-serve than Frito-lay would. So either they can’t do it or will not be able to do it with Frito lay cost. ?

Remember that the strategic capabilities you choose to build should ultimately contribute to achieving your "how to win" decisions by positioning your company to create superior value or lower cost for your chosen set of “where to play” areas.

For deeper knowledge check framework section at www.2yd.ch

Feel free to comment with your personal experiences and ask questions.

Let’s also connect if we share common interests.

For more articles check my Linkedin profile and Blog posts at www.2yd.ch

C.Firat Caliskan