58 of 60 people found the following review helpful
5.0 out of 5 stars A must-read for Customer Perspective in Balanced Scorecard
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...
Published on November 17, 2004 by Peter Leerskov
30 of 31 people found the following review helpful
2.0 out of 5 stars Buy the Harvard Business Review article reprint instead
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.
Published on November 12, 1998
Most Helpful First | Newest First
58 of 60 people found the following review helpful
5.0 out of 5 stars A must-read for Customer Perspective in Balanced Scorecard,
This review is from: The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market (Paperback)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 ;-)
MSc in International Business (Marketing & Management) and Graduate Diploma in E-business
30 of 31 people found the following review helpful
2.0 out of 5 stars Buy the Harvard Business Review article reprint instead,
By A Customer
This review is from: The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market (Paperback)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.
35 of 37 people found the following review helpful
4.0 out of 5 stars Common sense marketing perspective,
This review is from: The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market (Paperback)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.
23 of 26 people found the following review helpful
5.0 out of 5 stars Not just for the sales and marketing folks!,
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.
19 of 21 people found the following review helpful
5.0 out of 5 stars How to Select, Focus, and Dominate,
18 of 20 people found the following review helpful
4.0 out of 5 stars Straightforward answers to questions of strategy,
11 of 11 people found the following review helpful
5.0 out of 5 stars A CEO shouldn't be a CEO if he/hasn't read this book,
27 of 32 people found the following review helpful
5.0 out of 5 stars This book will reorganize the way you think about marketing.,
36 of 44 people found the following review helpful
1.0 out of 5 stars Don't be fooled ....,
By A Customer
It falls victim to two of the most dangerous pitfalls of management books
Treat the recommendations with extreme caution ...
6 of 6 people found the following review helpful
5.0 out of 5 stars A Business Classic,
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.
Most Helpful First | Newest First
The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market by Frederik D. Wiersema (Paperback - January 10, 1997)