Chapter 2.2‎ > ‎

Deciding How to Compete



There seems to be general agreement among business strategists that finding and


Exploiting comparative advance should be the core focus of business Strategy; a more

complex issue is deciding how to find the best strategy. The various strategy paradigms

that are proposed by management consultants, company executives, and academics stress

the importance of market focus, capabilities, relationships, and. the organizational change One interesting analysis of successful companies proposes three possible strategies for successful differentiation from competitors to gain market leadership: operational excellence, product leadership, and customer intimacy.41 The Discipline of Market Leaders proposes that a company should not try to be superior in all three disciplines. Instead, management needs to be superior in the discipline where the company has the greatest comparative advantage while maintaining competitive parity in the two other disciplines. The three disciplines are described: Operationally excellent companies deliver a combination of quality, price, and ease of purchase that no one else in their market can match. They are not product or service innovators, nor do they cultivate one-on-one relationships with their customers.42American Airlines, Southwest Airlines, and Wal-Mart are examples of operationally excellent companies. Hewlett-Packard and Nike correspond to the product innovator discipline, while the United States Automobile Association has one-on-one relationships with its military personnel members who purchase automobile insurance