This document discusses different value disciplines that companies can pursue to achieve competitive advantage: operational excellence, product leadership, and customer intimacy. It provides examples of companies that exemplify each discipline. Operational excellence focuses on reliable, low-cost products and services, like McDonald's. Product leaders focus on cutting-edge products through invention and development, like Johnson & Johnson. Customer-intimate companies focus on advisory services and relationships, like Home Depot. Companies must align their operating models, including processes, structure, culture and management systems, with their chosen value discipline to succeed.

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.

10. 10/26/2023 10
Customer intimacy

11. 10/26/2023 11

12. Product Leadership
10/26/2023 12