Three paths to market leadership - the business strategy of Wiersema and Treacy - Part 1
How do you position your company as market leader? If you fail to see the wood for the trees among competitors, Wiersema and Treacy's business strategy model provides a solid base to excel in your core value through a well-chosen value strategy. As soon as you extend this value consistently throughout your entire business operation, you will find yourself one step ahead of the competition.
What is the business strategy of Wiersema and Treacy?
Wiersema and Treacy's business strategy model is a marketing model that consists of three different value disciplines: product leadership, operational excellence and customer intimacy. The model provides an important tool for making choices about your company’s strategy and positioning. At the same time, the tool is quite useful to distinguish your company from the market competition. In many cases this business strategy model has proved to be indispensable in B2B marketing plans.
According to Wiersema and Treacy, a company should always focus on one of the value strategies below:
- Product leadership
This value strategy puts the product at the centre. Here, it is most important that your company delivers excellent products or services to the consumer.
- Operational excellence
In this value strategy, your unique customer processes take centre stage. You may focus, for example, on the ease with which customers can purchase a product or request your services.
- Customer intimacy
In this value strategy, all eyes are on the consumer. Here, you may focus on consumer service, consumer (experience) and a long-term relationship with your customer.
How can you implement this strategy in your business?
If you want to apply Treacy and Wiersema’s business strategy model, you must first compare your current business profile with your desired future profile. Within the marketing plan, you can use the model to analyze your company's current situation, both internally and externally. Based on this analysis, you can:
- Describe your current strategy and situation
- Conduct market research and adjust your strategy accordingly
- Choose a single value proposition to focus on after completing the market research
- Align your company's positioning with the chosen value. It is crucial here that this positioning remains in line with your company's mission and vision.
- Translate the chosen value into all operational business processes, management systems, corporate structures, and the organizational culture.
According to Treacy and Wiersema's model, a company creates value for its customers by responding to their wants and needs. In this context, 'value' means choosing the strategic foundation for your business. Specifically, this strategy focuses on everything related to customer convenience. By focusing more on customer needs, your company provides the optimal service that encourages consumers to choose you over the competition.
The model states that if a company focuses completely on one of the three strategies, namely product leadership, operational excellence, or customer intimacy. It is capable of becoming a market leader. A prerequisite, however, is that you do not completely sideline the other two strategies. The chosen value strategy simply takes precedence over the other two.
You might think that in order to compete today, companies must meet all the different expectations of the customer. However, it is precisely by narrowing your business focus that you gain the opportunity to focus entirely on delivering superior customer value in line with one of the three value disciplines. By maximizing their commitment to this, market leaders excel at delivering a single, unique value, thereby fulfilling the most critical customer need.
Putting one and two together
In short, your company must excel in one of Wiersema and Treacy's three value strategies in order to efficiently set yourself apart from the competition. This will enable you to move towards market leadership. Adapt your choice of value strategy to what the customer wants and needs and become the best in class for that value. It is important, however, to not forget about the other two values. Compete on the standards and keep those in balance.
If this blog post inspired you, contact comma and discover together your company’s best path to achieve market leadership. Fly high & enjoy the ride!
