Book Review: Winning Behavior

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Winning Behavior

by Terry R. Bacon & David G. Pugh

Portfolio ©2003

224 pages

What Smart Companies Do Differently

The two business development experts who authored Winning Behavior have examined the actions of both successful and unsuccessful businesses to determine which behaviors serve a company well and which ones drive it into the ground. By studying the best practices of successful companies, such as Disney, Volvo, Men’s Warehouse, and several others, the authors have found that companies improve their businesses when they distinguish themselves from the rest in positive ways. They also explain that losing sight of customer expectations is a sure-fire way to lose market share quickly.

Terry Bacon and David Pugh have identified nine crucial domains of differentiation. They write that learning to differentiate operationally, interpersonally, exceptionally and symbolically, and establishing and building credibility in each of these areas, are the ways organizations get a jump on competitors. Their company profiles and research into customer preferences provide the roots of a competitive strategy that can help any organization succeed.

Domains of Differentiation

While acknowledging that differentiation is difficult to achieve and is often fleeting, the authors have identified the crucial domains of differentiation, which include:

1. Product Uniqueness. This is the most common form of differentiation and is based on unique product features and innovations or on the suite of features the product offers. Because it is easiest for competitors to copy, unless it is protected by trademarks, patents or copyrights, it is also the most fleeting.

2. Distribution. Companies such as Dell Computer, Mary Kay and have chosen to reach their target markets in ways that offer them advantages over more traditional competitors. This is also another domain that is easily copied by rivals.

3. Product Market Segmentation. Companies that choose to focus on a narrow niche of a broader market differentiate themselves by specializing in a particular segment. Companies that focus on a smaller segment usually benefits customers with more knowledgeable salespeople, focused service, and cheaper prices.

4. Customer Service/After-Sales Service. Nordstrom, Wal-Mart, Men’s Warehouse and Ritz-Carlton differentiate themselves by making their customers feel valued by providing them with prompt attention, timely response to questions and complaints, friendly and courteous staff, and expert assistance.

5. Breadth of Offerings. Full-service companies have differentiated themselves in a wide range of industries, including financial services, engineering and construction, and home supplies. By providing one-stop shopping to their customers, companies such as The Home Depot offer them the convenience of finding everything in one location, and the confidence of knowing employees can offer advice in a range of product ideas.

6. Brand. The authors write that the most powerful form of product differentiation occurs when the product becomes a recognizable and valued brand that represents trust. This bias in buying can take decades to build, but once it is established in the minds of customers it is a significant advantage in the marketplace.

Sheer Marketplace Muscle

7. Size/Market Dominance. When a company achieves marketplace distinction through its size and dominance of the market, its advantage builds from a combination of brand-name recognition, accessibility, capacity, broad expertise and marketplace muscle. Microsoft and Wal-Mart are perfect examples of muscle-bound firms.

8. Low Price. Although low price does not differentiate a company’s products, it does offer a strategy that can differentiate a company by driving less-efficient rivals out of the marketplace. Wal-Mart and Charles Schwab do this by striving to provide goods and services at a lower price than their rivals and selling to mass markets. Kohl’s, Target and Best Buy use this differentiation factor to guide their success.

9. Behavior. The way a company treats its customers, conducts its business, attracts and leads employees, and conveys itself to its market can be a giant differentiating factor. Great customer service is also a big part of this. ~

Why We Like ThIs Book

Winning Behavior presents a well-formulated evaluation tool that allows companies to examine their own behaviors and see how they stack up against other organizations that have differentiated themselves through their unique actions. The authors point out that you are how you behave, and an organization’s behavior establishes and builds the integrity on which it can set itself apart from its competitors to create a business strategy that drives success. ~

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