|Authors: |Treacy, Michael | | |Wiersema, Fred | |Source: |Fortune; 2/6/95, Vol. 131 Issue 2, p88, 6p, 4c | |Reviews & Products: |DISCIPLINE of Market Leaders, The (Book) | |Abstract: |Features an excerpt from the book, `The Discipline of Market Leaders,' by the authors, | | |management consultants at CSC Index. How successful companies must find the unique value that| | |they alone can deliver to a chosen market; Three distinct value disciplines; Operational | | |excellence; Product leadership; Customer intimacy; Examples from Price/Costco, Dell Computer,| | |Johnson & Johnson and more. INSET: Which discipline should you choose? |
Section: FORTUNE BOOK EXCERPT
|HOW MARKET LEADERS KEEP THEIR EDGE |
Instead of trying to do all things well, they pick just one discipline--best price, best product, or best solution--and execute like crazy. WHY CAN Casio sell a calculator more cheaply than Kellogg can sell a box of cornflakes? Does corn cost that much more than silicon? • Why does it take only a few minutes and no paperwork to pick up or drop off a rental car at Hertz's #1 Club Gold, but twice that time and an annoying name/address form to check into a Hilton hotel? Are they afraid you'll steal the room? • Why is it that Federal Express can "absolutely, positively" deliver a package overnight, but Delta, American, and United Airlines have trouble keeping your bags on your plane? Do they think you don't care? • Why does Lands' End remember your last order and your family members' sizes, but after ten years of membership you are still being solicited by American Express to join? Don't the people at Amex know you're a customer? • Why can you get patient help from a Home Depot clerk when selecting a $2.70 package of screws, but you can't get any advice when purchasing a $2,700 personal computer from IBM's direct-ordering service? Doesn't IBM think customer service is worth the time? Why do some companies endear themselves to us while others just don't seem to know how to please? Don't the latter see what they are doing -- and not doing? How long do they think they can get away with it? No one goes to work in the morning intending to fail. But managers at a great many companies, for all practical purposes, have chosen failure. Don't they see that the world has changed? Customers today want more of those things they value. If they value low cost, they want it lower. If they value convenience or speed when they buy, they want it easier and faster. If they look for state-of-the-art design, they want to see the art pushed forward. If they need expert advice, they want companies to give them more depth, more time, and more of a feeling that they're the only customer. That's precisely why companies like Kellogg, Hilton, American Express, United, Delta, and IBM are on a slippery slope. One or more companies in their markets have increased the value offered to customers by improving products, cutting prices, or enhancing service. By raising the level of value that customers expect from everyone, leading companies are driving the market, and driving competitors downhill. Companies that can't hold their own will be pushed off a cliff. Today's market leaders understand the battle they're in. They know they have to redefine value by...