The Discipline of Market Leaders

Essay by hopia May 2005

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Many organizations try to be all things to all people, and end up being mediocre or worse on everything. As an old saying says "A Jack-of-all-trades is a master of none!" This can be very true to most companies but the problem is they fail to realize it. The authors' thesis stresses that successful organizations do extremely well at bringing one form of value to their chosen customers. The key factor here is "focus". Michael Treacy and Fred Wiersema emphasized that market leaders should decide a single "value discipline" on total cost, product, or solution. And then, construct their organization around it. They can sustain their leadership position not by resting on their success, but by presenting better value in the long run. Choosing one discipline to master does not mean discarding the other two, only that a company must stake its reputation and focus its energy and assets on a single one to achieve sustainable success.

No company can reliably succeed today by trying to be all things to all customers. However, through detailed case studies of some of the world's best-known companies, The Discipline of Market Leaders examines the implications of each discipline from an operating standpoint, offering step-by-step guidance on choosing and implementing the right one. Each discipline demands a distinct organizational model with its own structure, processes, information systems, management systems, and culture. It revolutionizes the way of thinking about customers, competition, markets, and the fundamental structure of your organization.

Why and how this is done are the two key questions the book addresses. There are three concepts that are introduced in this book that every business needs. First is the value proposition. It is an unspoken promise to deliver a particular combination of values, quality, performance, etc. The second is the value-driven operating model. It...