The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market

This book's concepts for strategic marketing management are so widely accepted that the popular Balanced Scorecard concept of Kaplan and Norton in 2001 decided to adopt the ideas for the "customer perspective". The authors manage to take Michael Porter's two generic competitive strategies - Differentiation and Cost Leader - and elaborate on these to an extent never presented so elegantly before. In the process, they discover a third generic strategy - Customer Intimacy. Thus, Treacy and Wiersema distinguish between focusing on the following value dimensions: - Operational excellence (cost leadership / focus on supply chain management) - Product leadership (innovation / focus on product lifecycle management) - Customer Intimacy (service leadership /focus on customer relationship management) These are the FOUR RULES that govern market leaders' actions: Rule 1: Provide the best offering in the marketplace by excelling in a specific dimension of value Rule 2: Maintain threshold standards on the other dimensions of value Rule 3: Dominate your market by improving value year after year Rule 4: Build a well-tuned operating model dedicated to delivering unmatched value Expanding on the fourth rule - operating models - may the best long-term contribution of this book. The authors explain in detail and via case stories how the operating models differ for each of the three value propositions. In practice, I've learned that by explaining the operating models, many people can easier find themselves depicted than in the overall generic dimensions of cost, service or product leadership. OPERATIONAL EXCELLENCE or Cost Leadership - Best total cost - operating model: Key success factor: Formula! Golden rule: Variety kills efficiency Culture: Disciplined teamwork; Process focused; Conformance, "one size fits all" mindset Organization: Centralized functions; high skills at the core of the organization Core processes: Product delivery and basic service cycle; built on standard, no frills fixed assets Management Systems: Command and control; Compensation fixed to cost and quality; transaction profitability tracking Information Technology: Integrated, low-cost transaction systems; Mobile and remote technologies PRODUCT LEADERSHIP - Best product - operating model: Key success factor: Talent! Golden rule: Cannibalize your success with breakthroughs Culture: Concept, future driven; Experimentation, "out of the box" mindset; Attack, go for it, win Organization: Ad-hoc, organic, and cellular; High skills abound in loose-knit structures Core processes: Invention, Commercialisation; Market exploitation; Disjoint work procedures Management Systems: Decisive, risk oriented; Reward individuals' innovation capacity; Product lifecycle profitability Information Technology: Person-to-person communications systems; Technologies enabling cooperation and knowledge management CUSTOMER INTIMACY - Best total solution - operating model: Key success factor: Solution! Golden rule:

This business book should be in EVERY marketing and sales professional's library. In one reading of less than four hours you can understand the distinct value disciplines that define your company. And, just as important, you can recognize the value disciplines of your customers and competition. But, you don't have to be strictly a sales person. I'm my company's Chief Technology Officer and I felt the book was very valuable - after my CEO made me read it!The message of The Discipline Of Market Leaders is that no company can succeed today by trying to be all things to all people. It must instead find the unique value that it alone can deliver to a chosen market. Why and how this is done are the two key questions the book addresses,Three concepts are introduced that every business finds essential:1. the value proposition - implicit promise to deliver a particular combination of values - price, quality, performance, etc.2. value-driven operating model - combination of operating processes, manage-ment systems, business structure, and culture that allows a company to deliver on its value proposition.3. value disciplines - three desirable ways in which a company combines operating models and value propositions to be the best in their markets. THIS is the key take away from this book.Three distinct value disciplines:1. operational excellence - provide middle-of-the-market products at the best price with the least inconvenience - value proposition is low price and hassle-free service.2. product leadership - offering products that push performance boundaries - value proposition is offering the best product, period.3. customer intimacy - delivering NOT what the market wants but what specific customers want - value proposition the best solution for the customer with all the support needed to get the maximum value from our products.The selection of a value discipline is a central act that shapes every subsequent plan and decision a company makes, coloring the entire organization, from its competencies to its culture.If a company is going to achieve and sustain dominance, it must decide where it will stake its claim in the marketplace and what kind of value it will offer to its customers.markets, the only established way to improve value to customers is to cut process. If you haven't started thinking about cutting your way to leanness, it's going to cost you later.High quality is the cost of admission to the market. Without it, you're not even in the ballpark.Four new premises underlie successful business practice today:1. companies can no longer raise process in lockstep with higher costs2. companies can no longer aim for less than hassle-free service3. companies can no longer assume that good basic service is enough4. companies can no longer compromise on quality and product capabilitiesThese four points are critical to the book and to how you must think about value. It is true - we can no longer charge for high quality - it IS expected. By delivering superi

It is intrinsic to people to produce long wish lists. This book proves that reducing these lists and focusing one a few is a key discipline. You get more with less. Rather focus on ONE value rather than 10 etc. Then the authors give reasons why it is necessary to be very focussed.These are 1. Your brand will be recognised if the message is crisp. That means that usually your company can only be remembered for one core value.In the case of this book the authors propose that the choice is between three options, namely: the customer, the product or operations. 2. Competition prevents your company from investing in more than one core value. It is simply too expensive NOT to focus. Related to the latter is the excellent work on "Value Innovaton" by Reneé Mauborgne and Chan Kim. The latter take it one step further and suggest to desinvest in most values and superinvest in one. An example of this strategy is Formula 1 hotels in Europe. Low value in atmosphere, local service, bedroom quality but high value in convenience and hygiene. Excellent value for money. As a marketing consultant, I use this book all the time.

The message of this important book is that "no company can succeed today by trying to be all things to all people. It must instead find the unique value that it alone can deliver to a chosen market. Why and how this is done are the two key questions the book addresses." The authors focus with rigor and precision on three different "disciplines": operational excellence, product leadership, and customer intimacy. It remains for any company (for any organization, for that matter) to determine which of the three should be its primary discipline but all are obviously important...indeed interdependent. Nonetheless, one discipline should be pre-eminent. The authors examine dozens of companies which have concentrated primarily on one of the three "disciplines" so that they can select their customers and then narrow their focus inorder to gain and sustain dominance within their respective marketplaces. I think this book will be of substantial value to executives in any organization but of greatest value to those in organizations which are small-to-midsize. Unless they have dysfunctional management and/or defective products, their mastery of that discipline will enable them to compete more effectively against larger organizations which (obviously) have greater resources available. My own view is that as B2B and B2B2C continue to increase at exponentially greater velocity, leadership of ANY market will require mastery of customer intimacy and at least one (but preferably both) of the other two disciplines. In that event, the insights which Treacy and Wiersema share will be even more valuable.

For what it does and the way it does it this book deserves a 10. It directly and enjoyably addresses the point it sets out to make, and gets there. The basic point is this, companies that excell in the marketplace deliver on their customer's 'value expectation' with regard to themselves. The authors describe three areas where firms can and do excell in delivering on 'value expectation', operational excellence (best value), customer intimacy (service), and product leadership (innovation). They then describe in detail each of these positions. For each of the three basic positions presented the authors offer real examples of companies using the approach their describing, as well as how they succeed using it. This is the background to the idea of product positioning - instead of a product focus, the idea here is a market sector focus. The emphasis in "Discipline of Market Leaders" is on the customer's expectation for that particular market niche. Then, with sufficient details and examples to make it understandable and applicable, the mind set and process is developed and described. You'll see some familiar and not so familiar names like Wal-Mart, Sony, and Airborne Express used as examples throughout the book. Rather than using these names as an exercise in self-promotion the authors actually make interesting and applicable points through these examples and illustrations. I found the book an eye opening and memorable business read. I probably read between 75-100 business books a year and this is one I've remembered, and I've applied the material repeatedly with success. Most of my collegues agree that in business, time is a precious commodity and wasting it is not suffered gladly. Read this book you'll find the investment worth it.