Your Strategic Business Model forms the foundation for your go-to-market strategy and your competitive advantage.

In "The Discipline of Market Leaders", Michael Treacy and Fred Wiersema define three value dimensions that must be addressed in any business - product, customer and operations. Each has a performance threshold, which together form the price of entry. Assuming that a company can consistently deliver on those thresholds (and some businesses cannot currently do that), you then have the opportunity to choose one of the dimensions to focus your business.

The three options are Product Leadership, Customer Intimacy and Operational Excellence. None is inherently better than the others - there are good examples of companies being very successful with each, even within the same industry (think Apple, IBM and Dell). The one you choose will depend on your strengths and what your customers value.


You don't need to be "best of breed" in all three value dimensions. Nor can you be - they demand different kinds of employees, business processes, management and culture. Imagine this scenario:

Your leadership team has chosen a Product Leadership business model. Based on that decision, you identified that your core competencies must be innovation and rapid product deployment so that you can bring new, state-of-the-art products to market more quickly than your competitors.

You decide on a structure you need to succeed - a highly flexible one that allows you to rapidly form ad hoc teams of highly skilled contributors - and a culture that encourages risk-taking.

Now imagine trying to implement this business model with a culture and structure of process-focused, highly disciplined teams that demand high conformance and have a low tolerance for risk. While this environment would be a perfect match for an Operational Excellence business model, it would clearly work against Product Leadership.

The key is to choose your winnable game, and then focus intensely on it.