Knowledge Bank Blog, Category Strategy

Good Strategy

Is your category strategy set up to succeed?

If you do a search on ‘strategy’ on Amazon you get 227,772 results. Even when you filter it just to Business, Finance & Law, you get 52,520. There are a lot of people out there writing about strategy.

Some of you may even have read one or two of these books (back when you had time to sit down and read a Business book). For those of you who haven’t, we thought we’d give you a short summary of one – a book called ‘Good Strategy/Bad Strategy’ by Richard Rumelt.

He says strategy is “identifying the key challenges and the means to overcome them”. There are 3 things that underpin a good strategy – (1) a diagnosis that defines and explains the nature of the challenge, (2) a guiding policy for dealing with that challenge, (3) coherent actions designed to carry out the guiding policy. So – know what the problem is, identify WHAT you need to do and HOW to do it. Simple!

So, why are we talking about this? Well, for many of you, a category strategy will be one of the most important things you have or do. It sets out your view of how a category can achieve growth. It should drive what you do internally and form the basis of collaboration between suppliers and retailers.

However, we find that a lot of category strategies don’t punch their weight. They are presented once or twice and then quickly forgotten about. They don’t direct activities – internally and externally – in the way that they should. And they are often saying pretty much the same things as the competition.

We think there is a big opportunity to develop simpler, clearer and more compelling category strategies. And it requires 5 shifts;

1. From : Too much information, To : Less, more relevant information.  A lot of category strategies tell you everything you ever wanted to know (and quite a bit you didn’t) about the category. There are great nuggets there, but they get lost in the noise. So focus on the things that are most important – the key things the category needs to address.

2. From : A wealth of actions, To : A small number of key actions. We’ve seen category strategies with 40+ individual actions. Most of them will never get done and some may even be contradictory. There is little prioritisation. So how do you control which actions people focus on? The best category strategies are built around a few key actions. We call them Critical Moves.

3. From : Complicated language, To : Simple language.  We’ve talked before about the amount of jargon used in Business. This is OK when you are an expert and when everyone else is an expert. But a lot of the people who need to understand a category strategy aren’t experts. The more complicated the language, the less things are understood and remembered. This is a particular problem for a retailer who is seeing different suppliers pitch up with their view of the world. Different faces, different jargon, impossible to “hold” them all in mind. A good category strategy uses simple language that people understand and remember.

4. From : Generics, To : Specifics.  A lot of category strategies are vague about the type of shopper behaviour they are trying to drive or the things that need to be done to drive it. Everyone nods in agreement. “Well of course we want to make the category easier to shop”. But nobody really knows how, specifically, this will be done. A good category strategy is specific. People know what to do.

5. From : Being subjective, To : Being objective.  Many category strategies can be an agenda for the brand not the category. Suppliers may think they have disguised this, but a good retailer will sniff it out pretty quickly. Category strategies aren’t just about winning market share. They are about setting out how the category can grow. As a manufacturer, if you are leading that thinking and collaborating with a retailer, your brands should win disproportionately. Win/Win.

As has been demonstrated hundreds of times in human history, it is not always the biggest that wins. 100 slides doesn’t crush 20. The winner is usually the one that has the clearest plan of attack and makes sure that everyone can understand and execute that plan. As one of the great strategists, Sun Tzu said ‘every battle is won before it is fought’.

Is your category strategy set up to succeed?

Feel free to forward.  Have a great weekend and speak to you next week.