“Undisciplined” businesses who try to deliver all values become “mediocre”.
In this article, the author refers to a book titled “The Discipline of Market Leaders” by Michael Treacy and Fred Wiersema. It categorises customers into three types: those who value “lowest total cost”, “product distinction and performance”, and “personalised service and guidance”.
They add that successful organisations excel at delivering “a single type of value to customers”, also called “market disciplines”. According to the author, the three “market disciplines” which correspond to the three customer categories are “cost-effectiveness”, “cutting-edge” and “customisation”.
As per Treacy and Wiersema, operationally excellent organisations discard variety and focus on serving “high demand middle markets”, and product leaders sell what is new to create markets which previously didn’t exist. Further, companies that excel in customer intimacy are masters of data who understand their audience.
[5 minute read]