Value Disciplines
(Treacy and Wiersema)

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Trying to be leading on operational excellence, product leadership or customer intimacy. Explanation of Value Disciplines of Treacy and Wiersema. ('94)

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  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
  5. Resources
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Value Disciplines model - Treacy & WiersemaFour New RUles

According to CSC Index consultants Michael Treacy and Fred Wiersema in "The Discipline of Market Leaders", there are four new rules that competing companies must obey.

  1. Provide the best offer in the marketplace, by excelling in one specific dimension of value. Market leaders first develop a value proposition, one that is compelling and unmatched.
  2. Maintain threshold standards on other dimensions of value. You can't allow performance in other dimensions to slip so much that it impairs the attractiveness of your company's unmatched value.
  3. Dominate your market by improving the value year after year. When a company focuses all its assets, energies and attention on delivering and improving one type of customer value, it can nearly always deliver better performance in that dimension than another company that divides its attention among more than one.
  4. Build a well-tuned operating model dedicated to delivering unmatched value. In a competitive marketplace, the customer value must be improved. This is the imperative of the market leader. The operating model is the key to raising and resetting customer expectation.

What are Value Disciplines? Description

Treacy and Wiersema describe three generic value disciplines in their book. Any company must choose one of these value disciplines and consistently and vigorously act upon it. As indicated by the four rules mentioned above.

  • Operational Excellence. Superb operations and execution. Often by providing a reasonable quality at a very low price. Task-oriented vision towards personnel. The focus is on efficiency, streamlined operations, Supply Chain Management, no-frills, volume is important. Most large international corporations are operating out of this discipline. Measuring systems are very important. Extremely limited variation in product assortment. But see: Reverse Positioning.

  • Product Leadership. Very strong in innovation and brand marketing. Company operates in dynamic markets. The focus is on development, innovation, design, time to market, high margins in a short time frame. Flexible company cultures.

  • Customer Intimacy. Company excels in customer attention and customer service. Tailors its products and services to individual or almost individual customers. Large variation in product assortment. Focus is on: CRM, deliver products and services on time and above customer expectations, lifetime value concepts, reliability, being close to the customer. Give decision authority to employees that are close to the customer. Compare: Customer Relationship Management.

The Value Disciplines model is quite similar to the 3 generic strategies from Porter (Cost Leadership, Differentiation, Focus). However there is at least one major difference: according to the Value Disciplines model no discipline may be neglected: threshold levels on the 2 disciplines that are not selected must be maintained. According to Porter, companies that act like this run a risk to get "stuck in the middle".


Book: Michael Treacy & Fred Wiersema - The Discipline of Market Leaders -


Value Disciplines Forum
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  Value Discipline for Coca-Cola Company?
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  Balanced Value Disciplines...
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  Competitive Priorities
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  How to Adapt Value Disciplines Model to Services / Schools?
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  Customer Intimacy Discipline
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  Value discipline vs. value proposition
What is the difference between a value discipline ...
     
 
  Value Discipline Process?
Hi, I'm looking for a generic process to implement...
     
 
  What customers are willing to give up
Note that operational excellence (low cost, no-fri...
     
 
  Focusing on ONE Value Discipline
Be careful for the trap to get "stuck in the middl...
     
 
  Are Most Firms Opting for Operational Excellence?
Isn't it so that most (almost all) large corporati...
     
 

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Best Practices - Value Disciplines Premium
  Why not Use all 3 Value Disciplines?
Why is it not possible to use the three discipl...
     
 

Expert Tips - Value Disciplines Premium
 

Customer Centricity: Success Factors for Customer Intimacy

Customer / Consumer Centricity (CC) is a frequentl...
Usage (application): Value Disciplines, Customer Strategy, Customer Intimacy, Customer-oriented, CRM
 
 
 

Understanding your Customer's Needs

In order to transform your customer’s experience a...
Usage (application): Customer Targeting and Strategy
 
 
 

Extreme Customer Trust as a Source of Competitive Advantage

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Usage (application): Competitive Advantage, CRM, Customer Loyalty, Customer Intimacy
 
 
 

The Importance of Customer Differences in Markets with Network Effects: the Limits of Scale

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Resources - Value Disciplines Premium

Dynamic Competitive Paradigm of Managing Moving Targets

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Usage (application): Influence on Value Discipline Strategy
 

Fundamental Customer Centricity

Professor Ranjay Gulati gives his vision on what C...
Usage (application): Understanding what Customer Centricity Really is About
 

How Businesses can Use Information Technology (IT) in Strategic Ways

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Usage (application): Strategic Management, Information Technology
 

The Importance of a Long Term Focus on the Customer

Ohmae explains the importance of the fundamental b...
Usage (application): Interview Ohmae on the Need for a Long-term Customer Focus
 

Value Disciplines Diagram

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Usage (application): Corporate Strategic Focus
 
 

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Compare with Value Disciplines:  Core Competence  |  Distinctive Capabilities  |  Three Dimensional Business Definition  |  Value Profit Chain  |  Competitive Advantage  |  Experience Curve  |  Twelve Principles of the Network Economy  |  Strategic Types


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