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good” mind-set, and compensation systems that reward success. Intel, the leading
computer chip company, is a great example of a firm pursuing a successful product
leadership strategy.
Customer Intimacy

Companies pursuing this strategy excel in customer attention and customer
service. They tailor their products and services to individual or almost individual
customers. There is large variation in product assortment. The focus is on: customer
relationship management (CRM), deliver products and services on time and above
customer expectations, lifetime value concepts, reliability, being close to the
customer. Decision authority is given to employees who are close to the customer.
The operating principles of this value discipline include having a full range of
services available to serve customers upon demand—this may involve running what
the authors call a “hollow company,” where a variety of goods or services are
available quickly through contract arrangements, rather than the supplier business
having everything in stock all the time.
The recent partnership between Airborne Express, IBM, and Xerox is a great
example of an effective customer intimacy strategy. Airborne also provides
centralized control to IBM and Xerox part-distribution networks. Airborne provides
Xerox and IBM with a central source of shipment data and performance metrics. The
air-express carrier also manages a single, same-day delivery contract for both
companies. In addition, Airborne now examines same-day or special-delivery
[5]
requirements and recommends a lower-priced alternative where appropriate.
Only One Discipline
Treacy and Wiersema maintain that, because of the focus of management time
and resources that is required, a firm can realistically choose only one of these three
value disciplines in which to specialize. This logic is similar to Porter’s in that firms
that mix different strategies run the risk of being “stuck in the middle.” Most
companies, in fact, do not specialize in any of the three, and thus they realize only
mediocre or average levels of achievement in each area.
The companies that do not make the hard choices associated with focus are in
no sense market leaders. In today’s business environment of increased competition
and the need more than ever before for competitive differentiation, their complacency
will not lead to increased market share, sales, or profits.
“When we look at these managers’ businesses [complacent firms], we
invariably find companies that don’t excel, but are merely mediocre on the three
disciplines…What they haven’t done is create a breakthrough on any one dimension
to reach new heights of performance. They have not traveled past operational
competence to reach operational excellence, past customer responsiveness to achieve
customer intimacy, or beyond product differentiation to establish product leadership.
To these managers we say that if you decide to play an average game, to dabble in all
areas, don’t expect to become a market leader.”
[6]
Within the context of redesigning the operating model of a company to focus
on a particular value discipline, Treacy and Wiersema discuss creating what they call
“the cult of the customer.” This is a mind-set that is oriented toward putting the
customer’s needs as a key priority throughout the company, at all levels. They also

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