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The Strategy Canvas is a tool used in Blue Ocean Strategy to visually represent and compare the key factors and attributes of a company's product or service relative to its competitors, and identify opportunities for innovation and differentiation.
Strategy Canvas is a central diagnostic tool and an action framework for building a compelling blue ocean strategy. It graphically captures, in one simple picture, the current strategic landscape and the future prospects for an organization. The strategy canvas is developed by Chan Kim and Renée Mauborgne.
Step-by-Step Guide:
1. Define the Industry and Competitors
- Identify the industry or market you want to analyze and the competitors operating in that space.
- Select the main competitors and your own company for comparison.
2. Identify Key Competitive Factors
- Determine the critical factors that companies in your industry compete on. These could be price, quality, customer service, design, innovation, convenience, or any other attributes important to the customer.
- List these factors along the horizontal axis of the strategy canvas.
3. Rate Competitors on Each Factor
- Evaluate how well each competitor (including your company) performs on each competitive factor.
- Use a scale (e.g., 1 to 10) to rate the level of performance for each factor.
- Plot these ratings along the vertical axis for each competitor to create a visual representation.
4. Analyze the Current Industry Landscape
- Look at the graph to identify how competitors are positioned in terms of performance across the key factors.
- This will reveal where the market is over-focused, underperforming, or has gaps that can be filled.
5. Identify Opportunities for Differentiation
- Using the strategy canvas, identify areas where your company can invest in or stand out.
- You may find opportunities to reduce focus on factors that are less important to customers and increase focus on factors that will give your company a competitive advantage.
6. Develop Your Strategy
- Based on the analysis, create a new strategy that either differentiates your business or simplifies your offerings by focusing on key competitive factors that matter most to customers.
- Adjust your business model, product offerings, or customer experience to align with the new strategy.
7. Implement and Monitor
- Execute the strategy by aligning your resources and efforts toward the identified factors.
- Continuously monitor the competitive landscape and adjust your strategy as new competitors emerge or customer preferences change.
Example:
Cirque du Soleil revolutionized the circus industry by using the Strategy Canvas as part of their Blue Ocean Strategy. They shifted the focus away from traditional competitive factors in the circus industry and redefined the experience, creating a new market space that appealed to both circus lovers and theatergoers.
How Cirque du Soleil Applied the Strategy Canvas:
- Identifying Traditional Competitive Factors:
In the traditional circus industry, companies competed heavily on factors like animal performances, star performers, low ticket prices, and expensive venues (e.g., tents and large circuses). The circus industry was also competing with other forms of low-cost entertainment.
- Rating Competitors:
Using the strategy canvas, Cirque du Soleil analyzed traditional circuses and how they performed in each of these factors. They realized that circuses were heavily focused on areas that added costs (e.g., animal acts, large troupes) but didn’t necessarily add value for modern audiences.
- Identifying Differentiation Opportunities:
Cirque du Soleil identified that they could eliminate costly and outdated elements like animal performances and star performers while increasing focus on new elements that combined circus arts with elements of theater, including:
- Artistic storytelling: Focus on strong narratives.
- High-quality productions: Investing in music, lighting, and set design to elevate the show.
- Sophistication: Creating a more elegant experience that attracted adult audiences, unlike traditional circuses that mainly targeted children.
- Developing a New Strategy:
Based on their strategy canvas analysis, Cirque du Soleil created a differentiated offering by removing factors that were costly but offered diminishing returns (e.g., animal acts) and focused on innovation and artistic value (e.g., combining theater and circus performance). This redefined the audience's expectations and appealed to a new segment of high-paying customers.
- Execution and Success:
Cirque du Soleil implemented this unique strategy, creating a blue ocean where they had little direct competition. They attracted a global audience, with high ticket prices supported by the sophisticated, high-value entertainment they provided. This strategy allowed Cirque du Soleil to thrive in a declining industry, becoming a global entertainment leader.
Why It Was Successful:
Cirque du Soleil's use of the Strategy Canvas allowed them to redefine what a circus could be, focusing on delivering value through artistic and theatrical elements rather than traditional circus features. By creating a unique space where there was no competition, they avoided competing on price and instead offered a premium experience that revolutionized the entertainment industry. This approach helped them to stand out and build a global brand with immense success.
For more information on the topic, please see the source below:
Woods, P. (2020). The brand strategy canvas: A one-page guide for startups. Apress. https://doi.org/10.1007/978-1-4842-5159-1
#Competition #Positioning/Branding #Value Proposition #Revenue Model
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