Playing to Win summary

In the twilight of the 1990s, Olay found itself in trouble. Annual sales had plummeted below the $800 million mark. Once a cherished skin care brand, Olay had now garnered an unenviable moniker – "Oil of Old Lady". This derogatory label encapsulated the brand's image in the market: outdated and disconnected. The iconic pink cream, housed in unremarkable plastic bottles and priced at $3.99, simply failed to evoke the allure it once did.

Procter & Gamble – often known simply as P&G – stood at a crossroads. For a company aiming to dominate the beauty sector, having flagship brands in both skin care and hair care was non-negotiable. Their skin care segment, with Olay as its torchbearer, was now their Achilles' heel. The dilemma? Should they keep Olay as it was; initiate a new brand; acquire an existing brand; introduce their makeup brand Cover Girl to the skincare sector; or breathe fresh life into Olay by pushing it into a novel segment?

P&G chose the path of reinvention. The word "Oil" was jettisoned from its name. The brand itself was overhauled, together with its business model, packaging, and the essence of its value proposition. Their vision was clear: ascend to market leadership in North America, skyrocket sales to the $1 billion mark, establish a global footprint, and carve out a niche middle ground between mass and prestige – a newly-titled masstige segment.

The brand's focus narrowed down to women aged 35 and above who were noticing their first wrinkles. These were women willing to splurge for quality and remain loyal once their trust was secured. In 1999 Olay launched Total Effects, a product which was a fusion of enriched ingredients and insights, vowing to combat not just wrinkles but multiple aging signs. Gone was the $3.99 price tag. The new Olay, which blended the qualities of prestige products, was presented in mass retail stores at an elevated $18.99. This strategic pricing, coupled with revamped branding and packaging, effectively reshaped its value proposition.

Enlisting the expertise of innovators for top-notch ingredients, collaborating with designers, and teaming up with advertisers, Olay fortified its capabilities. The results post-2000 were nothing short of spectacular. For ten years, Olay basked in double-digit growth, blossoming into a $2.5 billion brand with enviable margins, marking its transformation from a faltering entity to a formidable force in skincare.

Olay's impressive turnaround underscored a critical aspect of business: the power of a well-defined strategy. But what exactly constitutes a strategy? Let's delve into that next.