Value Disciplines
(Treacy and Wiersema)

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Four 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

Forum Forum discussions about Value Disciplines. Below you can ask a question about this topic, share your experiences, report a new development, or explain something. Start a new topic about Value Disciplines Share your knowledge here (or ask a question)   Why not Use all 3 Value Disciplines? Why is it not possible to use all three value disciplines in the same organization?... 17   9 comments What customers are willing to give up Note that operational excellence (low cost, no-frills) competitors may know perfectly well what their clients want, but even more what they are prepared to give up in exchange for a lower price. Class... 11   1 comments Focusing on ONE Value Discipline Be careful for the trap to get "stuck in the middle" in an effort to install concomitant high levels for all 3 value disciplines. Don't run after many rabbits at the same time; you might catch none.... 11   1 comments Value Discipline Process? Hi, I'm looking for a generic process to implement value disciplines thinking in a company. Who has some experience? Thanks --... 8   2 comments Value Discipline for Coca-Cola Company? Would you agree that the Coca-Cola Company's primary value principle is Operational Excellence? Although they are innovative in product leadership and aggressive in their branding and customer intimac... 5   1 comments Balanced Value Disciplines... In my opinion any company needs to apply a bit of all three customer disciplines that Treacy & Wiersema created, in order to optimize and guarantee the continuity of the organisation. It's practically... 5   2 comments Are Most Firms Opting for Operational Excellence? Isn't it so that most (almost all) large corporations are opting for the operational excellence strategy? I find it difficult to mention more than a few examples for the other two. Perhaps the Product... 5   9 comments Customer Intimacy Discipline If I establish a company that sells equipment with an aim to not only sell but provide customers with a know-how to use the equipment to their advantage, which one of the three disciplines would be mo... 4   Competitive Priorities Competitive priorities are critical, more operational, dimensions a process, company or an entire supply chain must posses to satisfy customers now and in the future and build market share. Any busin... 2   How to Adapt Value Disciplines Model to Services? Is this model applicable to services - how? I can visualize what a manufacturing company wanting to be "operationally excellent" or a "product leader" will do. But if it is a service company (let us ... 2   3 comments 🔥 NEW The Differences Between Customer-led and Market-oriented Companies The concepts "customer focus" and "market orientated" are often discussed and presented in different companies’ mission statements. It is important to know that there are significant differences betwe... 1

Best Practices The best, top-rated topics about Value Disciplines. Here you will find the most valuable ideas and practical suggestions. Value discipline vs. value proposition What is the difference between a value discipline and a value proposition?... 29   3 comments

Expert Tips Advanced insights about Value Disciplines. Here you will find professional advices by experts. Customer Centricity: Success Factors for Customer Intimacy Value Disciplines, Customer Strategy, Customer Intimacy, Customer-oriented, CRM Customer / Consumer Centricity (CC) is a frequently used concept used by companies to achieve competitive advantages. It... Understanding your Customer's Needs Customer Targeting and Strategy In order to transform your customer’s experience and to better understand your customer’s needs, it is helpful to constr... Extreme Customer Trust as a Source of Competitive Advantage Competitive Advantage, CRM, Customer Loyalty, Customer Intimacy Many companies are already highlighting the importance of trustworthiness by setting and sustaining honest prices and pr... The Importance of Customer Differences in Markets with Network Effects: the Limits of Scale Network Effect, Network Strategy, First Mover Advantage, Second-mover Strategy, Customer Intimacy, Market Segmentation The network effect (Metcalfe's Law) is the phenomenon that the value of a product or service increases (exponentially) w...

Information Sources Various sources of information regarding Value Disciplines. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops. Dynamic Competitive Paradigm of Managing Moving Targets Influence on Value Discipline Strategy In this article, Yu-Sang Chang first reviews the past and present competitive strategies that have been developed for a ... Fundamental Customer Centricity Understanding what Customer Centricity Really is About Professor Ranjay Gulati gives his vision on what Customer Centricity is about: aligning your firm in a fundamental way a... How Businesses can Use Information Technology (IT) in Strategic Ways Strategic Management, Information Technology This presentation looks at Information Technology from a strategic point of view. In other words, it discusses in what w... The Importance of a Long Term Focus on the Customer Interview Ohmae on the Need for a Long-term Customer Focus Ohmae explains the importance of the fundamental belief that all actions of a company need to be good for all concerned,... Value Disciplines Diagram Corporate Strategic Focus Download and edit this 12manage PowerPoint graphic for limited personal, educational and business use. Republishing in ...

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