ADDexec Summary:
It’s common knowledge that no business can be all things to all customers. What’s special about this book is how the authors dissect business focus not by the types of products or services a business offers, but by the way a business provides value.

Discipline argues that a necessary ingredient for success is to focus on leading via only one of three types of value-proposition: product leadership (i.e., providing best product in its class, like Google or Toyota/Lexus), operational excellence (i.e., providing lowest total cost, like Wal-Mart or Home Depot), or customer intimacy (providing best total solution, like DHL worldwide shipping).

For the executive with attention deficit disorder, the book is useful on at least two counts: (1) the title is a fast reminder that we can’t be all things to all people and (2) the theory of selecting a value-proposition model is both (a) sound advice and (b) useful for unifying or comprehending other business advice that may seem either incomplete or conflicting without the “type of value-proposition” idea as a dimension for examining business strategy.

Additional review and commentary:
It’s common knowledge that no business can be all things to all customers. Too many types of products under one brand or one roof is a bad idea. No 21st century company sets out to sell cars, lumber, and t-shirts under one brand (even if they say, “but that way we could be a one stop shop for construction companies!”). Same goes for too many types of services. Since 1995 when this best-selling book was first published, many other books have helped business owners either define core competencies (i.e., inner strengths) or key market sectors (i.e., external opportunities that can be targeted with the greatest efficiency).

The value of The Discipline of Market Leaders is in the authors’ look at a different dimension: the nature of the value-proposition. In 1995, they were the first to push the idea that, no matter how else you slice and dice your offerings or your clients, your final strategy won’t work unless all the pieces lead with the same type of value-proposition: either product leadership, operational excellence, and customer intimacy. In the 1995 edition, Wiersema and Treacy use Intel, AT&T, and Airborne Express as teaching examples to show how companies can lead from, respectively, product leadership, operational excellence, or customer intimacy. While all three companies continue to prosper in 2007 (with Airborne Express now part of DHL), some current examples might be useful.

Who would I pick as representative leaders in 2007? For product leadership, I’d point to Google with its leading and ever-improving search engine or Toyota with its consistently strong record of reliability and overall cus). For operational excellence, easy examples are Wal-Mart or IKEA, both with predictable product quality, price, and delivery – not always the best, but with the lowest total cost for their target customers. For customer intimacy, I’m coming up empty. Readers – feel free to leave a suggestion via the comments!

———-

Buy The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market from Amazon, used and new from $0.14 to $10.20.

note: The New Market Leaders is Wiersema’s 2001 followup to Discipline.