A Winning Business Model

The 3 Disciplines of Business Models

A successful business strategy delivers its objectives. That means the revenue it generates must be profitable. Revenue, growth, and market share are irrelevant if your strategy does not achieve profitability. There are three disciplines of operating models or business models1. You must clearly lead in one discipline and be competitive in the other two.

Operational Excellence
A company that focuses on operational excellence focuses on eliminating costs and keeping the product simple. This includes

A company that is focused on product/technology focuses on the product itself. This includes

Customer Intimacy
A company that is focused on customer intimacy focuses on the customer experience. This includes

As an example, let’s consider three polymer manufacturers: Dow, DuPont, and General Electric (GE). Dow is an operational excellence-focused company. Their message would be “Whatever you want, we have it cheaper.” DuPont is a product/technology-focused company. Their message would be “We have a better product than what you’re using now.” GE is a customer intimacy-focused company. Their message would be “However you want the product, we’ll make it work for you.”

Key Elements of Business Model Development

There are four key elements of business model development:

Customer selection
Value capture
Differentiation—Strategic Control
Learn more about developing a winning business model. Download our white paper, “Develop Your Go-to-Market Business Strategy.”

1Michael Treacy, The Disciplines of Market Leaders
years of industry experience helping businesses transform

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