The Hidden Where-to-Play Element in Strategy: Value System Stage
Where-to-Play strategy has a fifth overlooked dimension—value system stage—which determines a firm’s position in the value chain and fundamentally shapes its profitability model.
Summary
Martin extends the Playing to Win framework by identifying 'value system stage' as a critical yet hidden element of Where-to-Play strategy. Using Qualcomm as a case study, he illustrates how companies choose which stage(s) of the value system to participate in—through outsourcing, licensing IP, or vertical integration. This choice shapes strategic position and profitability model but receives far less attention than geographic or customer segment choices.
Editor's opinion
Martin's piece surfaces a genuinely underappreciated strategic dimension — which activities in the value system to own versus outsource — and his three-rule test (does outsourcing improve your strategy, can the partner hold you up, does it create a competitor?) is crisp and practical. The Herman Miller example is especially sharp: deliberately outsourcing your most critical activity to keep innovation fresh cuts against the usual "insource what matters" instinct.
Key concepts
Where-to-Play · Value chain positioning · Value system stage · Playing to Win framework · Competitive scope