The Delta Model

Deciding what an organization exists to do, reading its market, judging its own strengths, and assembling a plan that wins: management scholars regard this as the core of strategy. Several well-known frameworks guide managers through that reflection, most prominently Michael Porter's competitive strategy model and the resource-based view of the firm, which Gary Hamel and C.K. Prahalad helped popularize.

Arnoldo Hax contends that both approaches rest on flawed assumptions. Each treats strategy as a route to lasting competitive advantage, which fixes the rival at the center of attention. That focus, he argues, keeps a company tied to the past, measures success by defeating others, and encourages copying, so that offerings converge and become commodities, the worst fate a business can face.

Hax's alternative, the Delta Model, places the customer at the center instead. Drawing on years of research at MIT and a substantial consulting practice, it introduces new concepts and practical tools, including a different method of customer segmentation and a fresh way of assessing a firm's competencies. A major idea is the extended enterprise, a network linking suppliers, the company, customers, and complementors, which are firms whose products or services add value to what the company offers.

Illustrated with many examples, the book also explores how small and medium-sized businesses and nonprofit organizations can apply the model. It aims to help leaders of any organization break free of established habits and build strategic flexibility, a capacity especially valuable during crises, fierce competition, and rapid change.