Next Level strategy: Masters of two

February 28, 2024

The pinnacle of strategy is differentiating yourself from competitors. While ordinary companies focus on one differentiating factor, industry leaders are able to embrace two. They are Masters of Two.

One of the best known frameworks for identifying your strategy is Treacy & Wiersema’s “Value Disciplines.” In their 1994 book, “The Discipline of Market Leaders,” they distinguish three core strategies: Product Leadership, Operational Excellence, and Customer Intimacy. This is what they mean:

Goal: best product
Distinctive feature: highest quality
Innovation-focus: product 
Revenue-driver: margin 
Value-driver: product enhancement
Dominant function: R&D

Goal: reliable product
Distinctive feature: lowest total cost
Innovation-focus: process 
Revenue-driver: volume
Value-driver: streamlining
Dominant function: Logistics

Goal: loyal customers
Distinctive feature: best customer experience 
Innovation-focus: customization
Revenue-driver: retention 
Value-driver: relationship management 
Dominant function: CRM

For the average company, the advice is: pick one of these three. For two reasons: 1) doing well on one is already challenging, let alone spreading your attention over all three, 2) when you make a clear choice, customers recognize you and can make their choice as well.

That’s for normal companies. However, if you want to stand out and be an industry leader, you may need to step up your efforts and have a next level strategy based on two of these disciplines. In other words, you need to be a Master of Two.

A good example in the supermarket business is Lidl. Their original focus was on operational excellence. With a small selection of products, they focused on offering low prices. Increasingly, though, they compete on quality as well, in particular with their fruits and vegetables, which year after year are recognized for being the best in the market.

As this example also illustrates, the best way to become a Master of Two is to first excel at one value discipline and start adding another later on. The main reason for this is that focusing on two right from the start may get you stuck in the middle, not performing well on either one of them.

Is your business a Master of Two? Can it become one?

If you want to develop your strategy and implementation skills, and move beyond classics like this, the Certified Strategy & Implementation Consultant (CSIC) program may be something for you. Focusing on experienced consultants, facilitators and coaches, it adopts a novel, human-centered approach to strategy and implementation. Visit our website for more information and registration.

Source: GWFM Research & Study

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