Winning in the marketplace

One of the iconic business books that I enjoyed and learned a lot is the 1996 marketing book called the Discipline of Market Leaders, written by Michael Treacy and Fred Wiersema.  In here, the authors argued that for a company to dominate, it is important that it tries not to be everything to everybody, but requires that only one or two of the three ways to win the market.  In short, it is not possible to be a company that at the same time, be the greatest, cheapest, and with the best customer engagement and support.  For the authors, here are the 3 choices ( Just make sure you excel in 1, and you just need to be simply good at the other two).

a.) customer intimacy.  Some businesses are better than others because they treat their customers well and make them feel good.  Like Marriott.  like IBM.  These companies spend a lot of time to get to know their customers and work with them closely, so that they can become indispensable and hard to replaced.  These are companies that believes winning is about getting customers for life, or at worse, getting repeat customers. It is important for us now to spend more time with our best customers.

b.) operational excellence.  some businesses succeed because they are operationally well. like Walmart. like mcDonalds. Nobody said that they have customer intimacy.  They sell goods at reasonable prices, and still make money because they are efficienct.  In managing their inventory. In creating products.  In understanding and delivering what their customers want.   In making their people move fast, and the inventory faster.  They sell goods at lower or competitive price, because their efficiency makes them also a lower cost business.

c.) technical and management superiority.  like Microsoft. Like SAP. like Cisco.    People buy the products because they are the best in what they do.   They are leading edge.  They are not cheap, but they are the best in the marketplace.  People respect people and companies with mastery.

So these are the 3 disciplines in which you need to master one.  Which is the one for your company?

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