Delta model

Delta model is a customer-based approach to strategic management.^[1][2][3] Compared to a philosophical focus on the characteristics of a product (product economics), the model is based on customer economics. The customer-centric model was developed by Dean Wilde and Arnoldo Hax.

Haxioms

Haxioms are a set of principles, proposed by Arnoldo Hax, which serve as a framework for the conceptualization of the Delta Model, and since it somehow challenges the conventional wisdom regarding strategic thinking:

1. The center of the strategy is the customer
   This is the center of the Delta Model, being the customer the driving force for all actions undertaken by the company. Thus, the effort the Organizations have to do is to configure high value-added propositions to customers which will be both creative and unique.
2. You don't win by beating the competition. You win by achieving Customer Bonding
   Just as the central focus of the management is the Customer, the central focus of the strategy should be Customer Bonding. This stage is recognizable by a relationship based on transparency, fairness, and which produces long term benefits for all involved.
3. Strategy is not war; it is Love
   When we define the essence of strategy as a competitive advantage, we are at the same time denoting conflict as the way to think about business. If instead we reject this notion, our mind opens up to new alternatives and, since we are no longer in confrontation with our partners, other forms of cooperation can be considered. The extreme way of non-conflict is indeed LOVE.
4. A product-centric mentality is constraining; open your mindset to include the customers, the suppliers and the complementors as your key constituencies
   Since all business are related and dependent on other members of the supply chain, a wider view is needed to see this expanded enterprise, which is the entity of real importance in our strategic analysis. In this way we can better propose high-value propositions to our customers.
5. Try to understand your customer deeply. Strategy is done one customer at a time.
   The granular customer analysis is fundamental to complete a sensible customer segmentation. the extreme is in fact the consideration of each single customer individually with his/her own needs and wants.

References

1. ^ Value Based Management.net
2. ^ The Delta Model: Adaptive Management for a Changing World | MIT Sloan
3. ^ Dean & Company

See also

• Five forces analysis
• Resource-based view
• Value chain
• Porter's four corners model