Marketing -Competitive advantage

1. Value Discipline
Frame work

2. Introduction
Three areas to achieve Competitive Advantage :
- Operational Excellence
- Product Leadership
- Customer Intimacy.
 Operational Excellence: providing customers
with reliable products or services at competitive
prices. Little inconvenience.
 Product Leadership: state of the art.
 Customer Intimacy: Superior Customer-
relationship management

3. Learn From Examples
 What do we learn from operating models made
up of operating processes, business structure,
management systems, and culture, all organized
to create value at a profit.
 Different value disciplines demand different
operating processes.
 McDonalds’s customers love consistency,
speed, and meal value.

4. Operationally
Excellent
 Stellar at core processes/product supply.
 Expedient customer service/demand management.
 Plus fine tune your structure to empower the people
who can make a difference in producing value.
 You make sure your staff is indoctrinated with your
specific definition of success.

5. Product Leaders vs.
Customer-Intimacy
 Critical processes include invention,
product development, and market
exploitation.
See details about this topic in this article.
 Customer Intimacy companies
demonstrate superior aptitude in advisory
services and relationship management.
 Products Leaders: Johnson & Johnson
Customer Leaders: Home Depot.

6.  Companies that exceed in the same
disciplines have remarkably similar
operating models. Management systems,
business structures and the culture
of product leaders look alike.
 The similarities end.
 Homogeneity exists only among leaders
in the same value discipline.
Product Leaders vs.
Customer-Intimacy

7. Operational
Excellence
 Operationally excellent companies deliver a
combination of quality, price, and ease of purchases
that no one else in their market can match.
 Remember they are not product or service innovators
and they are not known for their one-to-one
relationships with customers.
 They execute exceptionally and guarantee low price
and/or hassle-free service to their customers.

8. Operational
Excellence
 Focused on the delivery system outsmarting Compaq
and IBM.
 Outperformed PC computer dealers by selling to
customers directly and by building to order rather than
carrying a large inventory.
 Integrated company’s logistics with its suppliers.
 Undercut Compaq and other PCs in price while
providing high quality products and services.

9. Check Out Price
Operational Excellence Example
 Club store with only 3,500 items compared to 50,000
in competitors.
 As a customer Price/Costco evaluates leading brands
and best values for customers and makes the decision
for you. New items are added that meet the criteria.
This keeps you coming back.
 Follows an operating model buying larger quantities
and negotiate better prices, carrying items that sell
well.
 They have good tracking systems on products. They
optimize floor space and the organization operates
well.

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Customer intimacy

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12. Product Leadership
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