Operational Excellence, Product Leadership, Customer Intimacy

Value Disciplines

Treacy and Wiersema

Summary of the Value Disciplines Model. Abstract

Treacy and Wiersema

The Value Disciplines model by Michael Treacy and Fred Wiersema describes three generic value disciplines. Any company must choose one of these value disciplines and act upon it consistently and vigorously.

Operational excellence: superb operations and execution often by providing a reasonable quality at a very low price. The focus is on efficiency, streamlining operations, Supply Chain Management, no-frills, volume counts. Most large international corporations are working out of this discipline.

Product leadership: very strong in innovation and brand marketing, operating in dynamic markets. The focus is on development, innovation, design, time-to-market, high margins in a short timeframe.

Customer intimacy: excel in customer attention and customer service. Tailor their products and services to individual or almost individual customers. Focus is on CRM, deliver products and services on time and above customer expectations, lifetime value concepts, reliability, being close to the customer.

Treacy and Wiersema argue in their excellent book The Discipline of Market Leaders that any company must choose to excel in one discipline, where it aims to be the best - in the world preferably. This does not mean the other 2 dimensions should be completely neglected, but rather that the company should aim to be merely 'OK' in these other two disciplines.