The delta model is a strategic management method focused on customer needs. It emphasizes customer focus over competitor focus and encourages using existing resources to accommodate customer needs. The model involves five main principles and four basic elements for execution.
A delta model is a method by which an organization engages in strategic management focused on customer needs. It was created by Arnoldo Haxe of the Massachusetts Institute of Technology Sloan School of Management and Dean Wilde and his team at the strategy consultancy Dean and Company. The primary goals of the model are outlined in five main principles, known as Haxioms, which state essential philosophies and strategies.
The first tenet and general philosophy of the delta model is that the entire strategy revolves around the customer. This concept is intended to be used at all levels of the company and in all areas of operation. The idea is that every effort should be directed towards the end result of pleasing the customer.
Another tenet of the delta model promotes customer focus rather than competitor focus. It stipulates that resources should be used to build a lasting relationship with the customer instead of trying to keep up or get ahead of the actions of other organizations offering the same product or service. It is believed that this focus will improve the company’s stability.
The third principle of the delta model focuses on the perception of the strategy and how it should be used. Instead of trying to use strategy to win against competitors, the method promotes using strategy to build goodwill with customers. This reduces some of the negative connotations of doing business by making the process of building success less aggressive and confrontational.
Another principle encourages diverting attention away from an organization’s perception of what the product should be and shifting the focus to the customer’s needs. This means using existing resources and vendors to accommodate those needs rather than building a model based solely on the organization’s insular view. Essentially, the idea is to focus on using existing networks and resources to find the best value for customers.
The final tenet of the delta model encourages refining the customer’s organizational understanding. This involves an in-depth look at large-scale statistical review of sales and customer behavior. A richer and more enlightening view of customer needs can be built by working to understand individual customer traits and general trends.
These principles are put into practice with the execution of four basic elements. The first is to build a strategy to align the product with customer needs, which is usually based on a company mission. Then that strategy needs to be integrated into the operations of the organization. Once the process has been started, the elements must be adapted for maximum efficiency and economy. Then the whole process is evaluated.
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