PTW/PI All-Stars Book Club – Chapter Thirteen

The Strategy Lesson from the Bud Light Fiasco

Welcome to Chapter Thirteen of the Playing to Win/Practitioner Insights (PTW/PI) book club. In the spirit of a book club discussion, I have responded to all previous comments and will continue to do so. Of the 37 all-star pieces out of the 260 in the series, the randomizer picked as the thirteenth chapter The Strategy Lesson from the Bud Light Fiasco. This one takes us back to the third biggest category – screeds – in which I just tee off on a subject. You can find the whole PTW/PI series here.

My Reflections on This Piece

I don’t do many like this, in which I criticize one specific horrible corporate decision. It was only this one and the one on advertising malpractice at Jaguar, which resulted in the trifecta – the CEO, design chief and ad agency getting sacked (or ‘resigned’). The reason I don’t do more is that hindsight is always 20-20, and I don’t want to chime in with the chorus of people saying an unsuccessful decision was stupid – unless I can specify a simple and actionable set of principles that would have enabled the company to have made a better choice in advance.

In the case of Bud Light (and Jaguar), I thought I could provide a way of thinking about the decision that would have avoided a complete disaster. It involves applying two principles.

The First Principle

The first principle is that strategy involves trade-offs, which comes by way of the great Michael Porter, who argued that if you haven’t made a trade-off, you won’t achieve competitive advantage.

As a bit of an aside, whenever I make this point, some people try to catch me in a conceptual contradiction: Aren’t you the Integrative Thinking guy who argues that you don’t have to accept trade-offs? No, it is not a contradiction. Integrative Thinking does not promise a return to the Garden of Eden. It simply argues that if you are facing a highly painful, fundamentally unacceptable trade-off, use Integrative Thinking to overcome that trade-off. But in doing so, you will still face trade-offs, however they won’t be either painful or unacceptable. The resulting trade-off will be the cost of having competitive advantage.

For example, I laud Four Seasons founder Isadore Sharp for using Integrative Thinking to overcome the unacceptable trade-off between operating small motels versus large city-center hotels. He loved the intimacy of the former but hated their lack of guest amenities. He loved the amenities of the latter but hated their cold, impersonal feel. His integrative solution was medium-sized hotels with extraordinary and unique service, which broke the unacceptable tradeoff but embraced an acceptable one. That acceptable trade-off was that Four Seasons was going to be a much smaller hotel chain, with (currently) 135 hotels featuring approximately 25K rooms, compared to Marriott with approximately 10K and 1.8M, respectively. Why stay that small? It was not possible to feature that extraordinary service level at the lower price points necessary to have a Marriott-sized customer base.

There are two generic trade-off problems with broadening one’s WTP. First, the existing HTW might not work in that broader WTP. In this case, Four Seasons’ How-to-Win (HTW) is only functional for a certain Where-to-Play (WTP). Similarly, Apple’s HTW has repeatedly been shown to not work well in the low-price handset WTP.

The second trade-off problem is that appealing to the members of the incremental WTP can impugn your HTW within your current WTP – the Bud Light situation. Existing Bud Light drinkers did not like their brand’s attempt to appeal to another WTP. Essentially, a quarter of Bud Light drinkers voted against drinking what Bud Light suggested was the favorite drink of trans influencer Dylan Mulvaney.

Since writing this All-Star piece, I have become even firmer in my beliefs about the dangers of expanding into a broader definition of customer WTP through the work I have been doing with ReD Associates – an initial cut of which was featured in this 2025 PTW/PI piece. Our work together argues that customers exist within what philosopher Martin Heidegger called worlds, each of which has specific norms, values, language, roles, relationships, rituals, practices, and boundaries – such as the world of TikTok dance video enthusiasts or Hermès Birkin bag lovers, discussed in that piece. Deeply understanding those features is a prerequisite to determining what value-adding role you seek to play in that world.

The last item on the list – boundaries – is critical here. Members of the world – not the company – decide on the boundaries of their world and if the company violates those boundaries – as Bud Light most certainly did – the world will punish you. Staying within the world-defined boundary is a trade-off that a company needs to accept to maintain its HTW.

So, the first principle is that there will be trade-offs and that you must understand the world that you currently serve to determine whether you are respecting an important world-driven trade-off or are violating an important boundary. Had Bud Light asked that set of questions before attempting to broaden its WTP, it would still be the #1 beer brand in America.

The Second Principle

The second principle is that if you seek to acquire a new segment of customers primarily or substantially because you hate your current customers, bad things are going to happen. The Bud Light Marketing Vice-President mocked her current customers as “fratty, kind of out of touch” (as detailed in my original article) and was desirous of a set of customers who valued “inclusivity” and included a greater percentage of women.

The head of Jaguar only anticipated retaining 10-15% of the current customer base after the new (but short-lived) rebranding. He didn’t like his old, white and staid customers and wanted some new ones – ones that liked incomprehensible ads, apparently.

The tricky thing for strategy is that when you hate your customers enough to want a very different set, it is unlikely that the very different set is going to be well-served by your existing HTW – so you have to invent a new HTW. Entirely reinventing your HTW is a huge task. It is foolish to think some superficial ‘rebranding’ constitutes a powerful new HTW. A trans influencer campaign is not a HTW for a new segment. If carefully thought through, it could contribute to a more comprehensive newly defined HTW. But it isn’t anything close to a HTW. Similarly, an edgy but incomprehensible car ad is not a HTW. Predictably, token reinvention worked dreadfully for both Bud Light and Jaguar.

If you don’t like your customers, you have a duty to yourself and the world to resign. Life is short and you have no moral obligation to spend your life serving customers you don’t like. Go to a company that has customers you like. There is no way you are going to be effective serving customers you hate.

Reader Comments

This piece was published just past the halfway point and received a medium number of comments – thirteen.

As with all the All-Stars, which wouldn’t be All-Stars if it weren’t for this fact, the comments are generally laudable – e.g. great article, another insightful article, and thought provoking.

A repeated comment was the echo chamber problem, well summarized in this quote: The object lesson of the Bud Light fiasco is that a homogenous worldview inside an organization can trigger a seismic event when it comes into contact with the diversity and dynamics of the real world.

Another comment focused on leadership – or more precisely, lack thereof: Bud Light chose a leader that let their own biases get in the way of data-based decision making, and brand strategy, including advertising and social media strategy. Certainly, a leader who hates her customers is a problem for any business.

Customers can be impetuous, inconsistent, capricious, and more – but you must not stop loving them. And that leads this insightful comment: This should serve as a warning more to younger less established brands: don’t bite the hand that feeds you.

I also liked a comment on repositioning: Your article is very timely as a reminder that we should not [reposition] lightly. I couldn’t agree more. I think that if someone did a meta-study on the success of repositioning/rebranding initiatives, the results would be dramatically negative on average. AG Lafley and I wrote a Harvard Business Review article about the dangers of breaking customer habits with silly repositioning and/or rebranding initiatives.

Finally, I will finish the reader comments section, as I often do, with my favorite reader quote:

I can’t help but think that there’s also a lesson in this for companies about politics. Basically, the far right and political progressives both use brand names as a proxy political fight. Any time a company jumps into that with a public campaign, it’s going to risk becoming part of that political proxy fight. It should bake that into its calculations before doing these sorts of public campaigns.

Without further ado, the original article…

Chapter Thirteen

Last year I wrote a Harvard Business Review piece, co-written with friend and Boston Consulting Group Henderson Institute Chair, Martin Reeves, on Strategy in a Hyperpolitical World. It turned out to be prescient with the Bud Light fiasco happening mere months thereafter. I have decided to elaborate on the subject in my 36thYear III Playing to Win/Practitioner Insights piece, The Strategy Lesson from the Bud Light Fiasco: Don’t Turn Fault Lines into Fissures. You can find the previous 146 PTW/PI here.

The Bud Light Fiasco

As most of the world knows, the fiasco started on April 1, 2023 when Dylan Mulvaney uploaded a Bud Light-sponsored post on Instagram in which she delightedly displayed the personalized cans of beer that Bud Light had sent her to celebrate the first anniversary of her transgender transition (and, presumably, to be displayed in the sponsored post). Bud Light sales immediately plummeted, leveling out (it seems, at least) at a 25% year-over-year drop, which is utterly unheard of in a stable consumer goods category such as beer. By mid-July, Bud Light had lost market share leadership in the US beer market, which it had held since 2001, to Modelo Especial.

Click to continue reading the original article…