Delta model

Delta model (after the Greek letter Delta, standing for transformation and change) is a customer-based approach to strategic management. Compared to a philosophical focus on the characteristics of a product (product economics), the model is based on consumer economics. The aim is to create a very strong bond between the company and customer. The customer-centric model was developed by Dean Wilde and Arnoldo Hax. The model was first thought about at a confab of alumni that took place at Massachusetts Institute of Technology (MIT). The development of the delta model created a large amount of research into the drivers of sustainable profitability for businesses. Delta model (after the Greek letter Delta, standing for transformation and change) is a customer-based approach to strategic management. Compared to a philosophical focus on the characteristics of a product (product economics), the model is based on consumer economics. The aim is to create a very strong bond between the company and customer. The customer-centric model was developed by Dean Wilde and Arnoldo Hax. The model was first thought about at a confab of alumni that took place at Massachusetts Institute of Technology (MIT). The development of the delta model created a large amount of research into the drivers of sustainable profitability for businesses. The unique set of frameworks and methodologies, grew from the fact that changes in the world of business were so enormous that existing managerial frameworks had become invalid or incomplete. These huge advancements were caused by the internet. The internet created a huge potential for communication and the incredible technology surrounding e- business and e-commerce enabled completely new business approaches. The idea was to get companies to stop focusing so strongly on competitors but to focus their strategies more around the customer. The delta model can be illustrated using the strategic triangle (see fig.1). There are three points: system lock-in, best customer solutions and best product. System lock- in enables market dominance and can achieve complementor share, it focuses on the entire system economics and instead of product-centered economics, which makes it very sustainable. Best customer solutions need cooperation and will achieve customer share. Best product enables the company to get the edge on competition, which will increase market share. These strategic points enable us to see strategic positions that show us new sources of profit. The Delta model does not focus on competition unlike Porter's five forces. One of Porter's forces is bargaining power of customer (haggling), whereas the Delta model aims to create a relationship with the customer and not see them as competition. Therefore, a negative of the Delta model is price, as putting the customer first and building an immensely strong customer rapport may mean that the company will struggle to increase prices. 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: Arnoldo C. Hax and Dean Wild publications