Three Paths to Market Leadership Article Reading: Three Paths to Market Leadership EMSM TP14 Cinthea Chen

From a start-up company… to a leader of the industry. They redefined value for customers in their respective markets. They built powerful, cohesive business systems that could deliver more of that value than competitors. By doing so they raised customers’ expectations beyond the competition’s reach.

Narrowing the focus on… delivering superior customer value. Operational excellence: Providing customers with reliable products or services at competitive prices and delivered with minimal difficulty or inconvenience. Customer intimacy: Segmenting and targeting markets precisely and then tailoring offering to match exactly the demands of those niches.

Product leadership: Offering customers leading-edge products and services that consistently enhance the customer’s use or application of the product, thereby making rivals’ goods obsolete. Narrowing the focus on… delivering superior customer value.

Masters of Two Market leaders typically aligned their entire operating model to serve one value discipline while meeting industry standards in the other two. It’s hard for competitors to catch up. However, to resolve the inherent tensions between the operating model that each value discipline demands, a few maverick companies have gone by mastering two.

USAA An everything operational excellence company: Centralized, highly automated, and incredibly disciplined. Also mastered at customer intimacy: Segments its customer base by, among other characteristics, life stage, and develops products, services, and servicing approaches for each of those segments.

Staples Achieves the lowest net-landed cost in the entire office stationery business, and intimate with a with a particular market – companies employing fewer than 50 people. Track sales by club card to further the intimacy with the market segment. It gives the company all kinds of data for use in satisfying its market.

Operational Excellence A specific strategic approach to the production and delivery of products and services. The objective is to lead its industry in price and convenience. Companies are focus on delivering products or services to customers at competitive prices and with minimal inconvenience.

Dell It has shown PC buyers that they don’t have to sacrifice quality or state-of-the-art technology in order to buy PCs easily and inexpensively. Focus on the delivery system by selling directly to their customers. Building to order rather than to inventory. Creating a disciplined, extremely low-cost culture.

General Electric Direct Connect program: Reengineer the old business process, redesign the information systems, reconfigure its management systems, and create a new mind-set among employees. Manufactures in response to customer demand instead of to inventory. It has reduced and simplified a complex and expensive warehousing and distribution system.

Customer Intimacy Companies those tailor and shape products and services to fit an increasingly fine definition of the customer. They are willing to spend and do almost anything to build customer’s lifetime value but not the value of any single transaction.

Home Depot Clerks spend whatever time is required with a customer to figure out which product will solve the home-repair problem. The business strategy is built not just around selling home-repair and improvement items inexpensively but also around the customer’s need for information and service.

Kraft Micro-merchandising programs: Develop different for every neighborhood outlet. The sales people now work with individual store managers and regional managers to create customized promotional programs from an extensive computerized menu. To develop promotion packages for store clusters for special events.

Product Leadership To be creative to recognize and embrace ideas that usually originate outside the company. The business and management processes have to be engineered for speed to commercialize ideas quickly. Product leaders must relentlessly pursue new solutions to the problems that the latest product or service has just solved.

J&J Acuvue Works hard at developing an open- mindedness to new ideas. The managers were quick to order changes to the Acuvue marketing program when early market tests were not as successful as they had expected. Each time J&J ventures into an untapped area, it risks millions of dollars as well as its reputation.

Choosing Disciplines… or Choosing Customers? Customers defines value within a matrix of price, convenience, and quality, with price the dominant factor, are requiring a company to focus on operational excellence. Customers those more concerned with obtaining precisely what meets their unique requirements, are requiring a company to focus on customer intimacy.

Customers who are primarily interested in fashion and trends, are requiring a company to focus on product leadership. … The same people can be found in all three customers depending on what they are buying. Choosing Disciplines… or Choosing Customers?

Sustaining the Lead Understand the importance of focusing the business on its value discipline and also push relentlessly to advance the organization’s operating model. The management of a company that’s a value leader must stay alert.

Sears Everyday low price Brand central Have models and actresses to endorse its fashion line.