Discipline of Market Leaders - Chapter 1

Why do some companies take us for granted while others strive to provide unimaginable levels of service and customer delight? The answer is in the art of business discipline which is the bridge between survival and extinction. In this new world of competition the balance of power has shifted from the manufacturers or service providers to the consumers and these consumers consistently demand more value in whatever they buy or experience. The authors explain three types of 'value disciplines' that companies must adopt in order to maintain leadership in their markets.

The first is Operational excellence or price which relates to cost of products or services. The cliché of better quality or exclusive products being more expensive than competitors is no longer valid. Survival and market leadership strategy in businesses today is to gain an advantage over costs. Time is the second 'value discipline'. Ever since technology has helped to create new benchmarks for customer expectations time is now positively correlated to money. The authors cite brilliant examples of companies like Wal-Mart, FedEx and AT&T that have rightly captured the time component of 'value discipline' to gain market leadership in their fields of business. The future will thus belong to companies who can further crack the code of this value creation by providing their services in lesser time. The third value creation is raising the bar. This stems from the companies that were once market leaders in their field have now been experiencing a profit free fall and threat of extinction. Authors provide examples of IBM and CSC as companies that were resting on their past laurels until competition devoured their market by raising the very bar these companies had created in their fields. The future would thus belong to companies that can constantly and consistently innovate to providing unexpected levels of service.

There is also an interesting 'Roadmap to Oblivion' graph for companies that do not wake up to the art of business discipline.

References

Michael Treacy and Fred Wiersema, (1997). 'The discipline of Market Leaders' (pp.4-14) New York: Basic Books.