Value Disciplines Model Interactive App
Value Disciplines Model Best Practices
The Value Disciplines Model was developed by Michael Treacy and Fred Wiersema in their book The Discipline of Market Leaders and suggests that in order to be viable a business must be successful in three key areas: Customer Intimacy, Product Leadership, and Operational Excellence. In addition, if an organization wants to become a market leader, it must excel in one of these areas.
More about Value Disciplines Model
Description of Value Disciplines Model
Each of the three Value Disciplines described by Treacy and Wiersema in their book are outlined below:
- Customer Intimacy: This discipline is about not only understanding the customer’s needs and wants, but rather going beyond that by providing a full range of services to help customers on demand. The point of creating a high level of intimacy with customers is to differentiate a company from the competition and therefore create the ability to provide a higher value and therefore charge a premium price. While it may seem that measuring Customer Intimacy would be a challenge, there are three ways it can be successfully evaluated:
- Reach and range – This involves the prevalence and availability of ways the customer can access service, as well as the number of various types of channels in which serviced can be reached.
- Cycle time – This is the measurement of the time between the customer’s need being discovered and the problem being solved.
- Product identification – This is the ability to figure out what new products or services are needed by the customer.
- Product Leadership: The Product Leadership discipline is about leading the category in product development. Often this discipline is a challenge for companies because it requires significant investment in product research and development, as well as continued investment in order to stay a step ahead of the competition. In order to be successful at Product Leadership, a company needs to excel in three main areas:
- Creativity – Ideas often need to be explored that are beyond a company’s current scope.
- Commercialism – Ideas need to be processed internally at a fast pace in order to be available for sale before the competition.
- Relentlessness – Companies need to be continually in search of ways to improve on products, even their own, in order to maintain their space and competitive edge in the market.
- Operational Excellence: The simple way to explain this discipline is that it centers around the principal of low price and hassle-free service. Basically, the company aspires to be the market leader through a combination of price and convenience. This requires a company to be creative in ways to reduce production costs or delivery methods so that delivery to the customer is convenient and economical. While challenging, Operational Excellence is possible by following three main principles:
- Personnel Management – Encourage a culture of efficiency and cost reduction among employees
- Transaction Management – Maximize efficiency of every transaction across the supply chain
- Measurement System Management – Focus on high quality and cost control at all times and measure improvements in each area
The second part of the Value Disciplines Model by Treacy and Wiersema asserts that while a company should strive to be good in these areas, it is virtually impossible to be excellent in all three. Therefore, a company should choose one discipline in which to be the market leader.
Praxie's Online Value Disciplines Model Tools & Templates
Strategy teams and business leaders looking to develop deeper relationships with their customers and stand out in their industry should explore how they stack up against the competition in the new online Value Disciplines Model template from Praxie. Various types of market surveys and focus groups can be used to provide insights, data and additional support when using the Value Disciplines Model method. The Value Disciplines Model was developed by Michael Treacy and Fred Wiersema in their book The Discipline of Market Leaders and suggests that in order to be viable a business must be successful in three key areas: Customer Intimacy, Product Leadership, and Operational Excellence. In addition, if an organization wants to become a market leader, it must excel in one of these areas. Get started with our Value Disciplines Model template.
How to use it:
- Review the definitions and questions for Product Leadership, Operational Excellence and Customer Intimacy.
- Based on your business vision and mission, outline how your organization will impact each of these elements as it delivers value to the market and creates competitive differentiation.
- Based on your Value Disciplines Model analysis, create an action plan to address your top opportunities, leverage your strengths and address any weaknesses.
Unlike most traditional strategy techniques, Praxie’s online Value Disciplines Model tools allow any team or organization to instantly begin working with our web templates and input forms. Our digital platform goes far beyond other software tools by including progress dashboards, data integration from existing documents or other SaaS software, elegant intuitive designs, and full access on any desktop or mobile device.