Playing To Win
Playing to Win & Regional Strategy
Fulfilling a Compelling Promise to the Customer
A reader (Baptiste) asked me a question about whether and how Playing to Win can be applied to the strategy for a region — with Champagne as his example. I think it is an interesting question and have dedicated this Playing to Win/Practitioner Insights (PTW/PI) piece to Playing to Win & Regional Strategy: Fulfilling a Compelling Promise to the Customer. And as always, you can find all the previous PTW/PI here.
The Short Answer
The short answer to the whether question is yes. Because strategy is what you do, not what you say and every region does some things and not others, it has a strategy. It may be good, bad or indifferent, but its actions imply that it holds some form of aspiration, it plays in some fields of endeavor and not others, it attempts to compete in some forms and not others, it has identifiable capabilities, and it organizes its operations in some way. Whether it intends to or not, by its actions every region answers the five questions in the Strategy Choice Cascade (pictured on the left above) in some fashion.
The Longer Answer
The how question requires a longer answer. What makes for a good regional strategy? As with all good strategy, a good regional strategy provides answers to the five questions in the Strategy Choice Cascade that fit together and reinforce.
Winning Aspiration
How should a region think about its aspiration? I would argue that a central aim of its strategy should be to produce long-term prosperity for the region. For example, the strategy of the Champagne region of France has resulted in a nearly tripling of the real price of a hectare of its vineyards over the past three decades despite the headwinds that the European wine industry has faced in the past two decades. Las Vegas real house prices have doubled over the same period. If a region produces prosperity but wrecks the social and/or physical environment, it won’t be sustainable and therefore won’t succeed in producing long-term prosperity.
But the aspiration must be higher — for winning in some way. For Champagne, it is to be known globally for a distinctive and revered form of wine. For Hollywood, it is to be the epicenter of the worldwide film industry. For Easter Island, it is to protect the cultural heritage of the Rapa Nui people and share it with the world. And for Las Vegas, it is to be the undisputed global destination for leisure and business travel.
Where-to-Play
Like a company, a region must choose a Where-to-Play. Obviously, the physical region is its geographicchoice. But even with that, there is a choice of specific boundaries. It is important to have boundaries so that customers (whether that is consumers of the region’s product or businesses operating in the region or residents of the region) know what is or is not in the actual region. As with most successful wine regions, Champagne has clearly defined and rigid boundaries of the appellation. If a vineyard or winery isn’t within the boundaries, it doesn’t produce champagne!
In Las Vegas, there are tiered boundaries — On-the-Strip is higher-end relative to Off-the-Strip. In the New York theater scene, there are tight definitions of theaters that are designated as Broadway, Off-Broadway, and Off-Off-Broadway. Those are all definitive boundaries.
In addition to the geographical dimension, the Where-to-Play must define a meaningful offering to customers — a specific experience, and/or a specific product. For Champagne, for example, it is a specific beverage — a luxury bubbly wine from a particular place — that competes with wines (bubbly and otherwise) from other regions.
How-to-Win
The region has to choose a distinctive way of being superior to all others in the chosen Where-to-Play. It needs to create value for the customers of its region, whether wine drinkers, film creators/watchers, individual and/or business travelers, etc. To win, it needs to make a Promise-to-the Customer (PTTC) that is valuable, memorable, and deliverable/auditable. A PTTC with those attributes is what motivates desired customer action.
For Champagne, it promises that its signature product will be a consistently pleasant drinking experience. It ensures that by enforcing the origin of the grapes to be from the confines of the appellation, made from the three permitted grape varieties, and produced in a highly specified and regimented production process. But champagne producers have gone beyond those strict rules with an approach that ensures consistency across vintages. They keep a proportion of the wine from each vintage to form a reserve which is blended into the current year’s wine to produce a remarkable level of consistent taste across the years. The Veuve Clicquot (pictured above) tastes the same year after year, unlike other types of wines, which have taste profiles that vary year-by-year based on the given year’s weather conditions.
Based on its ability to deliver its unique PTTC, there are plenty of other bubbly wines out there, but to champagne customers, they aren’t champagne.
Must-have Capabilities
Like a company, a region needs to have its How-to-Win underpinned by Must-have Capabilities that competitive regions can’t and/or won’t replicate. For Champagne, that includes numerous generations of winemaking expertise across 1600 champagne producers, a unique set of soil conditions, and a regional brand name in which the region has made decades of investments.
Regions with the strongest strategies typically support the building of capabilities that benefit the whole region. For example, the Napa and Somona wine regions heavily support nearby University of California-Davis, which is arguably the world’s leading university for the study of viticulture and oenology. Hollywood avidly supports the world’s top two and four of the top six film schools, all in the greater Los Angeles area.
Enabling Management Systems
One notable thing about regional strategy, is that Enabling Management Systems are particularly important. It is hard enough to maintain strategy discipline in a single company, but in regions, numerous and diverse players need to be organized around the strategy.
For example, 1600 champagne producers span the spectrum from numerous family-owned wineries all the way to giant global businesses like LVMH. Plus, there are many grape producers in the region who sell to the champagne makers, and many other suppliers and merchants. Hollywood is chock-a-block full of fractious, independently minded producers, actors, writers, and directors.
The general strategy rule is that a region needs to be doctrinaire in enforcing adherence to its strategy. Champagne does that with an array of aggressively enforced rules that are designed to support the regional strategy.
Bordeaux, home of the most globally famous wines including Chateau Lafite Rothschild, Chateau Margaux, and Chateau Latour, is particularly doctrinaire. In 1855, under the direction of Emperor Napoleon III, France officially classified Bordeaux chateaus from 1st to 5th growth — and that classification system has survived to this day (apart from the elevation of Chateau Mouton Rothschild from 2nd to 1st growth in 1973 — but only after decades of lobbying by the powerful Rothschild family).
Too much freedom backfires, as with Silicon Valley. It was once the only place to be as a California tech company. But then it became a soul-destroying wasteland of urban blight with horrible traffic. Yes, if you get to the Eden-esque campuses of Google or Apple, you might forget the miserable experience of getting there. But as that experience got ever-worse, it precipitated an exodus of companies without super-high Silicon Valley region sunk costs to San Francisco — before San Francisco accelerated its own downward spiral. That spiral illustrates another important lesson of regional strategy. It needs to be doctrinaire on behalf of customers — not the stewards — of the region, as has happened with San Francisco, which is run for the politicians of San Francisco, not the residents, businesses or tourists.
A key enabling system for many, if not all, regional strategies is enforcement. For example, Champagne has spent unrestrainedly on suing the hell out of any wine producer outside Champagne that attempts to brand its products with the name ‘champagne.’
A Nice Regional Strategy Story
The Maldives makes for a nice regional strategy story. In 2024, it won World’s Leading Travel Destination for the fifth straight year — a record for any destination. That was its Winning Aspiration: to be the best. Its Where-to-Play was luxury beach tourism. Its How-to-Win centered on the overwater bungalow. This is a classic case of not being first but entering and overwhelming the originators. Bora Bora was the first vacation spot to become renowned for its overwater bungalows. But, while Bora Bora popularized the overwater bungalow, it currently has 20 resorts featuring them while Maldives has over 500! Its clear PTTC is Discover the Sunny Side of Life, which it delivers in overwater bungalows on island paradises.
But that requires very specific Must-Have Capabilities. With resorts on 130 of its 1200 islands spread across 500 miles of Indian Ocean, it needs specialized infrastructure to get guests to their resort island comfortably and efficiently. The solution is the combination of Trans Maldivian Airways — the largest seaplane operator in the world — and the recently upgraded (2022) seaplane terminal next to the country’s international airport — also the highest capacity seaplane terminal in the world.
And a key part of its Enabling Management Systems is Maldives Marketing & Public Relations Corporation (MMPRC), which won the award for the World’s Leading Tourist Board in two consecutive years. That management system demonstrated its importance and value during COVID when MMPRC created and enforced an innovative set of protocols that kept the Maldives open during the entirety of the pandemic when most tourist destinations around the world were closed. The protocols took a lot of time for us to work our way through, but they enabled my wife and me to not interrupt our annual pilgrimage to our favorite vacation spot in the world.
Tough Downsides
There are harsh downsides for regions that can’t deliver their PTTC. In tourism, terrorism can deal a devastating blow. When terrorists coordinated a series of bombings in tourist-intensive locations in Bali in 2002, killed 202 people, tourism fell two thirds before stabilizing at 50% down, from which it took a decade to recover. Suicide bombing of three Churches and three luxury hotels in Colombo, Sri Lanka in April 2019similarly devastated tourism there — just before COVID, which made recovery harder.
There is not a lot a region can do to prevent such devastating incidents from fringe elements. But these occurrences provide useful lessons in how important it is for a region to manage the attributes under its control that are critical to its strategy.
Practitioner Insights
Playing to Win applies to the strategy for a region just as it applies to strategy for a single company. It is like company strategy, only harder because of the need to coordinate many diverse players. As with company strategy, the Where-to-Play/How-to-Win combination is the heart of strategy. You have to have a compelling one to prosper as a region. However, if you don’t have a Winning Aspiration you won’t strive for a great heart of strategy.
Because of the heightened coordination challenge, Enabling Management Systems loom larger in regional strategy than company strategy. And in my observation, being doctrinaire in setting and enforcing standards is a big part of successful regional strategy. Wine regions only become consequential after they set and enforce standards that enable producers within their region to fulfill a consistent PTTC. That is one thing that the new world regions of North and South America, South Africa and Australia have learned from the successful old world regions of France, Italy and Spain.
That having been said, there is always a threat from bureaucratization to avoid. Bureaucrats always want the world they control to work better and more conveniently for themselves. Entrepreneurs want everything to work better for customers. To the extent you are positioned to influence or guide regional strategy, make sure you take an entrepreneurial rather than bureaucratic stance. You want to be Champagne, not San Francisco!
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As a reminder, I previewed in January 2025 that I am doing a PTW/PI podcast series with friend Tiffani Bova. The third in the series is on LinkedIn here on Wednesday, April 9th at 12 noon EST and 9am PST. Look forward to seeing you there!
