The Discipline of Market Leaders
The Discipline of Market Leaders is a 1995 book written by Michael Treacy and Fred Wiersema and published by Addison-Wesley. The book discusses competitive business strategies. It made The New York Times Best Seller list after the authors placed orders for thousands of copies of their own book.
The core of the book is based on five years of research by the authors into companies such as Wal-Mart, Dell, Southwest Airlines, Cott, Airborne Express, Atlantic Richfield, Home Depot, Intel and Sony. It opens with several business questions, such as "Why is it that Casio can sell a calculator more cheaply than Kellogg's can sell a box of corn flakes? Does corn cost that much more than silicon?" The book raises questions about American business management and practices and then attempts to answer them. It also examines the financial benefits for companies that focus primarily on customer satisfaction rather than shareholder profits.
The book provides a business model based on three dimensions (called 'Value Disciplines"):
- Customer Intimacy
- Product Leadership
- Operational Excellence
and postulates that any successful business needs to maintain at least "acceptable" levels of performance in each of the three dimensions but would need to choose one of them to become a market leader in its field. The model suggests that if you truly want to excel in any of the three disciplines you will have to make sacrifices in the other two as these become mutually exclusive.
The book debuted on The New York Times Best Seller Non-Fiction list on February 26, 1995, and remained on the list for 15 weeks, peaking at No. 4. The book also debuted at No. 1 on the Bloomberg Businessweek best-seller list on April 1. In 2012 it was reported to have sold over 250,000 copies.
An August 1995 article in Bloomberg Businessweek by Will Stern first alleged the authors had manipulated sales of their book. Treacy and Addison-Wesley denied trying to manipulate sales, though Stern states according to his sources the campaign was orchestrated by Treacy and carried out with the help of Wiersema, Addison-Wesley and CSC Index, an international consulting firm Treacy regularly consulted for. It was revealed that the names of the bookstores that would be used to gauge book sales for The New York Times Best Seller list had become known, and that orders for the book had been placed at those stores. Stern states he interviewed dozens of book store owners, including one who took a suspicious order for 125 copies of the book shortly after it was published. After also interviewing over 100 book industry representatives, Stern concludes the authors spent over $250,000 buying over 10,000 copies of their own book. The authors admitted to buying "fewer than 10,000" copies of the book for clients and prospective clients. Stern also states CSC Index was used to covertly purchase an additional 30,000 to 40,000 copies. He traced many purchases of the book to CSC employees and affiliates. Most CSC affiliates refused to comment on the issue; however, the President of Paragon Co, a database marketing firm in Oxford, Ohio, confirmed that CSC had reimbursed him for over 10,000 copies of the book that he ordered for his firm, costing over $200,000. It was reportedly boasted around the office at Paragon Co that the company was involved in a scheme to make the book a best-seller, and so many copies of the book arrived at the firm they were stored in a tractor trailer. An independent book store in Manhattan sold 2,500 copies of the book to a consulting firm in Chicago.
The New York Times initially stated they were aware of the bulk book sales, and that they were confident the bulk sales had not increased the books position on the best-seller list. After reviewing the article in Bloomberg Businessweek, however, the editor of The New York Times book review section stated it was possible that the result had been manipulated, but that the process "would be so expensive that [they'd] have to have another reason for doing it beyond simply boosting book sales.
It is alleged the authors spent money on their own book in order to gain the benefits that are common from making The New York Times Best Seller list, such as speaking engagements and consulting opportunities, as well as further book sales, as chart success often begets more chart success. Treacy was said to be giving around 80 speeches a year, increasing his speaking fee from $25,000 to $30,000 after featuring on the best-seller list. While it is uncertain if the practice is illegal, the tactic has been described by publishers and booksellers as highly unethical. Following the incident The New York Times improved their methods for filtering bulk sales from affecting the list, and made a better effort to hide the names of stores that were reporting for them.
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- Yates, Ronald (March 27, 1995). "New Breed Of Company Gains Ground With Novel Approach: Customer First". Chicago Sun-Times. Retrieved May 8, 2013.
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- Stout, David (July 27, 1995). "A Best-Seller Plot Is Said to Be Charged". The New York Times. Retrieved May 8, 2013.
- Stern, Will (August 6, 1995). "Did Dirty Tricks Create A Best Seller?". Bloomberg Businessweek. Retrieved May 8, 2013.
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