The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market [ペーパーバック]

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

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.

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.