Value Discipline

How to distinguish your company from others by using your strengths? Learn more about the Value Discipline model

Author: Radosław Kołacki Published: Updated: Design

What is Value Discipline?

The „Value Discipline” concept was designed by Michael Treacy and Fred Wiersema. They suggest that each organization has unique values ​​that make it unique from its competitors. It is not only a tool for identifying advantages, but also a key element of an effective marketing strategy and building competitiveness.

According to the creators, the value of a brand does not depend only on its price. In fact, it also takes into account other aspects such as the customer’s experience when purchasing a product or service.

Main Directions of Value Discipline

McDonald’s is one of the perfect examples of achieving operational excellence, scaling, and well-designed processes

Operational Excellence

An organization that focuses onValue Disciplineon cost leadership (Operational Excellence), always strives to provide its customers with high-quality products or services at competitive prices and ease of purchase.

Operational excellence focuses on the efficiency and effectiveness of business processes. Companies that adopt this model strive to provide their customers with high-quality products and services at the lowest possible prices. They want to become leaders in operational efficiency, which allows them to deliver products quickly, reliably and at competitive prices. The key to success in this field is continuous improvement of processes, elimination of waste and constant search for ways to increase efficiency.

What characterizes Operational Excellence?

  • Focus on process optimization: Minimization of errors, standardization of activities.
  • Scalability: Increasing economies of scale to achieve lower operating costs.
  • Company examples: Dell, Walmart, McDonalds, Federal Express, EasyJet, RyanAir.
An example of a building of the luxury Nordstrom chain of stores

Customer Intimacy

Customer intimacy puts the customer experience first. Companies that choose this model strive to deeply understand their customers, adapting their offers to their individual needs and expectations. This approach does not focus only on transactions, but on building long-term, loyal relationships with customers. It’s not only about understanding what customers want now, but also anticipating their future needs.

Obtaining a one-time (large) transaction is subordinated to creating a long-term bond of intimacy. To achieve success with this strategy, organizations often use intensive customer relationship management (CRM).

What characterizes Customer Intimacy?

  • Building relationships: Long-term customer commitment and loyalty.
  • Individual approach: Tailoring offers and solutions to specific customer needs.
  • Company examples: Nordstrom, IBM, Home Depot.
Example of the interior of a Tesla vehicle

Product Leadership

Product leadership focuses on innovation. Companies that adopt this model strive to continually introduce new, breakthrough products and services that define or redefine the market. For them, the key is to always be one step ahead of the competition by investing in research and development, as well as promoting a culture of innovation among employees.

The organization invests heavily in research and development and often has a flexible structure, stimulating the efficiency and creativity of its employees. This Value Discipline strategy means that new and innovative products are often „better, smaller, faster, more fashionable and cheaper” than their predecessors.

What characterizes Product Leadership?

  • Emphasis on innovation: Conducting research and development of new technologies and solutions.
  • Speed ​​to market: Ability to quickly adapt to changing market needs, e.g. by applying strategyminimum viable product MVP.
  • Company examples: Apple, Tesla, SpaceX.

Value Discipline Scheme

The diagram helps to establish the vision of the project, which I presented earlier in the entryProject Vision.Below I present a tool thanks to which, in a relatively simple way, a person managing a project or brand is able to determine the values ​​they stand for

associated with or aspires to.
[pdf-embedder url=”http://kolacki.eu/wp-content/uploads/2018/02/value-disciplines.pdf” title=”value disciplines”]

Value Discipline Strategy [EN]

Learn more about the strategy in the video below

https://www.youtube.com/watch?v=NtuArGXUP9Y&ab_channel=PepijnSchoemaker

Sources:
business-to-you.com
toolshero.com