Porter (1996) stated, “The essence of strategy is choosing to perform activities differently than rivals do” (p. 96). Value disciplines are the fundamental competitive strategies and operational models that firms use to differentiate within a market. By giving definition and clarity to the form of differentiating value, organizations are enabled to easily align their operations in order to create value for customers. The three forms of customer value include having the best price, best product, and customer intimacy (Treacy & Wiersema, 1993). Treacy (1995) later wrote, “To deliver this kind of unmatched value … you have to back it up with an unmatched way of operating your business” (p. 195). After strategy selection, the extent to which operations are aligned with delivering a chosen strategy determines how successful the organization can be at creating that form of value. For example, supply chain efficiency is the singular focus to organizations such as Walmart, whereas constant reinvention and a total focus on innovation is critical to Apple. According to Treacy and Wiersema (1993), “Companies that push the boundaries of one value discipline while meeting industry standards in the other two gain such a lead that competitors find it hard to catch up” (p. 85).

Does your organization hold the line on two, and clearly differentiate on one? When your customers can tell you that, unaided, you’ll know your strategy is working.

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Categories: Strategic Planning