How market leaders keep their edge

Research shows that no company can succeed today by trying to be all things to all people. It must instead find the unique value that it alone can deliver to a chosen market. Choosing one discipline to master does not mean that a company abandons the others, only that it picks a dimension of value on which to stake its market reputation over the long term. Three distinct value disciplines have been identified, so called because each discipline produces a different kind of customer value. 

 

The first value discipline is called operational excellence. Companies that pursue this are not primarily product or service innovators, nor do they cultivate deep, one-to-one relationships with customers. Instead, operationally excellent companies provide middle-of-the-market products at the best price with the least inconvenience. Their proposition to customers is simple: low price or hassle-free service, or both. 

The second value discipline is called product leadership. Its practitioners concentrate on offering products that push performance boundaries. Their proposition to customers is an offer of the best product period. Moreover, product leaders do not build their positions with just one innovation; they continue to innovate year after year, product cycle after product cycle. With Nike, the superior value does not reside just in its athletic footwear, but also in the comfort customers can take from knowing that whatever product they buy from Nike will represent the hottest style and technology on the market. For these product leaders, competition is not about price or customer service (though those can’t be ignored); it’s about product performance.

 

The third value discipline is named customer intimacy. Its adherents focus on delivering not what the market wants but what specific customers want. Customer-intimate companies do not pursue one-time transactions; they cultivate relationships. They specialize in satisfying unique needs, which often only they recognize, through a close relationship with – and intimate knowledge of – the customer. Their proposition to the customer: we have the best solution for you and we provide all the support you need to achieve optimum results or value, or both, from whatever products you buy.