I recently read an excellent book called The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market. Although a little dated – published in 1995 – the content still holds very true. According to the book, there are one of three value disciplines that a company can pursue:
- Product Innovation – offer products that stay ahead of the curve and push performance. Examples include 3M, Intel, and Apple.
- Operational Excellence – offer the lowest price in the most convenient way. Examples include McDonalds, Wal-Mart, and Toyota.
- Customer Intimacy – offer customized, customer-centric solutions that focus on retaining customers long-term by meeting their specific needs. Examples include Nordstrom, Airborne Express, and Four Seasons.
The question is, which one is your company pursuing? You must pick one and put your stake in the ground, or risk being simply mediocre. This doesn’t necessarily mean you ignore the other two disciplines, but that you balance them in a secondary manner to the one that defines your company. In fact, most companies today can’t afford to ignore the other two. Zappos has made a name for itself in delivering amazing customer service, and yet their main value discipline is more likely operational excellence – the ability to sell name brand shoes online at a low price, ship it fast anywhere in North America with a no-cost return policy, and provide easy to access 24/7 customer service. Or, BMW who adopts a product innovation discipline in continually delivering high performance vehicles, and yet must concede towards operational excellence to ensure their pricing remains competitive. Just look at some of their latest entries in the marketplace, the 1-Series and Mini, that come in under the $30k price point. Or, their flagship 3-Series that now starts at just a little over $30k – price points previously unheard of at BMW.
I highly recommend this book to start-ups, small business owners and enterprise managers. It’s a great exercise to run your company through and can help you get very focused. I’m putting this into practice myself! Thanks Dom for the recommendation.
Rajan is the founder and Editor-in-Chief of BIG Marketing for Small Business. He's an award-winning marketing strategist who is passionate about branding, digital marketing and social media. He spent nearly a decade as the marketing executive at global IT firm Peer 1 Hosting and was instrumental in their explosive growth.