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on November 17, 2004
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: Solve the client's broader problem
Culture: Client and filed driven; Variation: "Have it your way" mindset
Organization: Entrepreneurial client teams; High skills in the field
Core processes: Client acquisition and development; Solution development; Flexible and responsive work procedures
Management Systems: Revenue and share-of-wallet driven; Rewards based in part on client feedback; Lifetime value of client
Information Technology: Customer databases linking internal and external information; Knowledge bases built around expertise

If you're interested in Customer Intimacy, you may want to add Wiersema's additional book on only this strategy to your shopping basket. I highly recommend both paperback books ... great value for money ;-)

Peter Leerskov,
MSc in International Business (Marketing & Management) and Graduate Diploma in E-business
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on November 12, 1998
Excellent content; just not a book's worth. The authors say virtually nothing more than they did in their superb HBR article of the same name a few years back. Another case of a fine 10-page idea gratuitously expanded into a book.
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on February 21, 2000
Winning firms focus on one of three customer value disciplines: product leadership, customer intimacy, or operational excellence. Trying to be all things to everybody is tantamount to being nothing for anyone. If your firm can't get its act together, you'll find this an inspiring book that makes a compelling case that success is only possible by having the courage to focus on specific tasks & disciplines. This seems very elementary, but I've observed many firms that refused to choose what they wanted to be, ensuring that they became nothing. This book is helpful in positioning exercises.
I have two concerns about the book. 1, it doesn't need to be this long in order to get the central idea across. 2, I'm becoming increasingly convinced that this model is counterproductive in a Geoff Moore tornado period. If you're in a high-tech tornado, wait until Main Street before applying discipline.
Aside from these caveats, I still find the simple model presented in this book as being useful in analyzing market approaches. You have to understand the model in order to know when it isn't appropriate. Product Managers, sales, marketing and product development staff need to be aware of this book and its ideas.
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on December 8, 2003
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 costs
2. companies can no longer aim for less than hassle-free service
3. companies can no longer assume that good basic service is enough
4. companies can no longer compromise on quality and product capabilities
These 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 superior value, companies change their customers' expectations. In effect, these companies became market leaders NOT by fulfilling old-fashioned ideas of value, but by getting their business to master one band in the value spectrum. They believed in three important truths that characterize the new world of competition:
1. Different customers buy different kinds of value. You can't hope to be the best in all dimensions, so you choose your customers and narrow your value focus.
2. As value standards rise, so do customer expectations; so you can stay ahead only by moving ahead.
3. Producing an unmatched level of a particular value requires a superior operating model - "a machine" - dedicated to just that kind of value.
Four rules that govern market leaders' actions:
1. Provide the best offering in the marketplace by excelling in a specific value disci-pline.
2. Maintain threshold standards on other dimensions of value.
3. Dominate your market by improving value year after year,
4. Build a well-tuned operating model dedicated to delivering unmatched value.
The operating model is the market leader's ultimate weapon in its quest for market domination. Value comes from choosing customers and narrowing the operations focus to best serve those customers. Customer satisfaction and loyalty are simply the by-product of delivering on a compelling value proposition - not the drivers behind it. When a company selects and pursues one of the value disciplines, it ceases to resemble its competitors.
Customer-intimate companies demonstrate superior aptitude in advisory services and relationship management. This is an incredibly difficult concept for sales and marketing professionals to grasp. They want the largest market possible. If you are customer-intimate, your market is one company at a time. This calls for hard work. Customer-intimate companies don't deliver what the market wants, but what a spe-cific customer wants. The customer-intimate company makes a business of knowing the people it sells to and the products and services they need. It continually tailors its products and services, and does so at reasonable prices. The customer-intimate company's greatest asset is, not surprisingly, its customers' loyalty.
Customer-intimate companies don't pursue transactions; they cultivate relationships.
They tailor their mix of services or customize the products, even if it means acting as a broker to obtain these services and products from third parties or co-providers.
Where to begin? Start with the last chapter and take a close look at Figure 11. From that point I realized my company's value discipline. The rest fell neatly into place.
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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.
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on October 18, 2000
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.
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on March 20, 1998
The premise of the book is that successful companies direct all of their efforts towards operational excellence, product leadership, or customer intimacy. For each "discipline" (and it does take discipline), the authors present examples, generally well known, of companies that succeed because of this focus. This book manages to present a usable model for managers and a unique perspective to explain the success of many top performing companies. Most business books either present too much unrelated theory or repeat a single assertion that should be a magazine article. Every chapter of this book explains something new, and supports its main contention. The model seems to have withstood the test of time (unlike many of the companies in "In Search of Excellence" several years ago), because most of the companies profiled are still market leaders, even though the book was originally published in 1995. The model is appealing to business observers, because it is intuitive but not obvious, and it enables the reader to imagine other companies that are not profiled and fit them into the model easily. The structure of the book (one chapter about one discipline, then a chapter in-depth about an example) makes the book easy to follow, and convenient to read during a commute.
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on March 19, 1998
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.
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on February 19, 2003
You can't make money trying to be all things to all people.
Such a simple idea and so hard to live up to. Treacy argues that companies compete on three dimensions: Product Innovation, Low Cost Provision (aka Operational Excellence) or Customer Intimacy. He further argues that the way to make money is by being best in one (and only one) dimension. Trying to be "world-class" in more than one dimension diffuses your efforts, sets up contradictions in your organization and confuses your customers. Pick how you want to compete and be disciplined about sticking to it.
This book offers a classic model for thinking about business and how you serve your customers More than just high-level strategy setting, this book gives you a lens through which to prioritize projects and make decisions at every level of management. It brings clarity to confused business cultures (or at least gives leaders a way to talk about why they have different visions of the future of the company).
Incidentally, there has been a fair amount of quantitative research since this book was first published confirming the correlation between strategic alignment and financial performance. As long as you've maintained a minimum (parity) on the other dimensions, companies that stick to one agenda really do perform better financially.
I was taught the basic model years ago and have used it more times than I can count since. This book is on my very short list of "must-read". The examples are getting a little out-of-date now, but the core lesson is timeless.
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on March 1, 2002
Notwithstanding the allegations about "book-buying" to get this book up the business charts (which I have no idea about whether they are true or not), the real disappointment here is the book's content.
It falls victim to two of the most dangerous pitfalls of management books
(1) excessive post-rationalisation (e.g. "I've got a nice, simple model and by god I'm going to make these examples fit it"), and
(2) picking winners (e.g. "here some companies that are successful ... here's some things that they do ... if you do them then you'll be successful too")
meaning that the result is evangelical ("you will believe") rather than a detached, objective view of what makes some companies successful and others not. Either that - or it's just a very long way of saying (again) "stick to the knitting" ! To say that the book oversimplifies the integrated nature of the modern corporation is a massive understatement.
Treat the recommendations with extreme caution ...
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