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Outsmarting Your Competition with Strategy Canvas: A Blue Ocean Approach

As a business owner or entrepreneur, you want to stay on top of your competition. But how do you do that?

The answer lies in understanding your business’s unique value proposition and your competitors’ strengths and weaknesses. This is where strategy canvas comes in handy.

In this article, we will explore the purpose, definition, features, and benefits of strategy canvas, and how it can help you stay ahead of your competition and create uncontested market space.

Purpose of Strategy Canvas

The primary purpose of strategy canvas is to conduct a competitive analysis and identify the factors of competition in your industry. By plotting your company’s offerings against your competitors’ offerings, you can identify areas where your business can differentiate and create more value for your customers.

The value curve that is created by the strategy canvas helps you visualize your current market space and see where the opportunities lie.

Definition of Blue Ocean Strategy

The blue ocean strategy is a framework developed by W. Chan Kim and Rene Mauborgne.

It refers to a market space where there is no competition or very little competition. This creates an opportunity for a business to create a unique product or service that meets an unmet need of customers.

Blue ocean strategy focuses on creating customer value through innovation and differentiation. This is achieved by creating a value proposition that aligns with customer needs and desires.

X and Y axes

The

X and Y axes are the two components of the strategy canvas graph. The X-axis represents the factors of competition, while the Y-axis represents the degree of offering.

The factors of competition can include things such as price, product features, customer service, and marketing. The degree of offering refers to how much value is offered to the customer for each of the factors of competition.

By plotting these factors against each other, you can see where your business stands in relation to other competitors in your industry.

Creating a Strategy Canvas graph

To create a Strategy Canvas graph, you first need to identify the factors of competition in your industry. This can be done through market research, analyzing consumer trends, and getting feedback from customers.

Once you have identified these factors, you can plot your business offerings against your competitor’s offerings. You can use different colors to represent your offerings and your competitors’ offerings on the graph.

Connecting the plotted points will create a value curve that shows where the opportunities for differentiation lie. Benefits of Strategy Canvas:

1.

Competitive Advantage: Strategy Canvas helps you identify areas where you can create a competitive advantage by differentiating your business offerings from your competition. 2.

Customer Value Creation: By creating a value curve, Strategy Canvas helps you understand your customers’ needs and desires better. This can help you create products and services that meet their needs and create more value for them.

3. Innovation: Strategy Canvas encourages creativity and innovation by challenging businesses to think outside the box and create new ways of meeting customer requirements.

4. Risk Reduction: By preventing businesses from relying on outdated models, Strategy Canvas can reduce the risks associated with stagnation in a competitive market.

Conclusion:

In conclusion, Strategy Canvas is a powerful tool that can help you understand your competition and identify opportunities for differentiation. By creating a value curve that aligns with customer needs and desires, you can create products and services that create more value for your customers.

Innovation and creativity are essential in creating an uncontested market space, and Strategy Canvas provides a framework for this. By implementing this tool, you can stay ahead of your competition and achieve business success.

Understanding market scenario

One of the key benefits of Strategy Canvas is that it helps business owners understand the overall market scenario. By analyzing industry benchmarks and competitors’ positions, businesses can get a clear understanding of their competitors’ strengths and weaknesses.

This information can be used to identify areas where a business can improve their offerings and create competitive differentiation. For example, a restaurant owner can use strategy canvas to analyze the menu variety and pricing of the competitors in their area.

By identifying the areas where they are lacking, they can modify their menus accordingly to offer more options and better pricing that aligns with the needs of the customers. This will help them create a better value proposition while setting themselves apart from the competition in the market.

Identifying areas of divergence

Another benefit of Strategy Canvas is that it helps businesses identify areas of divergence. By analyzing a value curve of the market space, businesses can pinpoint the areas where their offerings diverge from their competition.

This information can be used to create a competitive differentiation strategy to help businesses stand out from the crowd. For example, a car manufacturer can use this tool to analyze the features offered by their competitors and identify the areas where they are lacking.

This can help the manufacturer add more innovative features to their products such as electric cars or autonomous driving systems, which are not offered by their competitors. By focusing on these areas of divergence, the manufacturer can attract more customers and increase their market share.

Realizing new opportunities

Strategy Canvas also helps businesses realize new opportunities in the market space. By analyzing the market space and identifying unmet needs, businesses can create innovative products and services that cater to niche markets.

For example, a fashion retailer can use strategy canvas to analyze the pricing and variety of their competitors and identify areas where they can offer unique products tailored to niche markets. By focusing on these areas, they can attract customers who are looking for unique styles and fashion that is not offered by their competitors.

This can help them gain a competitive advantage and increase their market share. Southwest Airlines’ differentiated strategy

Southwest Airlines is an excellent example of a company that successfully implemented a differentiated strategy using strategy canvas.

Southwest Airlines chose to focus on frequent departures and low prices while still maintaining a friendly service that differentiated them from their competitors. By reducing the turnaround time of the aircraft, they were able to offer frequent departures and optimize their operations to offer low prices.

The company went against traditional airlines’ practices by offering direct flights instead of hub-and-spoke systems, which made air travel more accessible and affordable for customers. They also eliminated first-class seating which removed a layer of complexity from their operations.

This Blue Ocean move allowed Southwest Airlines to create a differentiated position, which attracted customers and boosted their market share.

Impact of strategy on market position

Southwest Airlines’ strategy canvas strategy had a significant impact on their market position. By offering frequent departures and direct flights, they created a niche market that was not served by their competitors.

They also offered this service at a lower price point, making air travel more affordable for customers. This strategy helped Southwest Airlines gain a competitive advantage in the industry.

By creating a differentiated position, they were able to attract a new customer base that was not previously served by their competitors. The company’s strategy allowed them to avoid direct competition and create an uncontested market space, known as the blue ocean strategy.

This move helped the company grow and become a key player in the airline industry. In conclusion, Strategy Canvas is a powerful tool that businesses can use to gain a competitive advantage by analyzing their market space and identifying opportunities for differentiation.

By understanding the market scenario, identifying areas of divergence, and realizing new opportunities, businesses can create a differentiated position that sets them apart from their competition. Southwest Airlines’ differentiated strategy is a prime example of how companies can use strategy canvas to create an uncontested market space and become a key player in their respective industries.

In conclusion, Strategy Canvas is a valuable tool for businesses to analyze their market space, identify opportunities for differentiation, and gain a competitive advantage. By understanding the market scenario, identifying areas of divergence, and realizing new opportunities, businesses can create a unique position that sets them apart from their competition.

The benefits of Strategy Canvas include creating customer value, encouraging innovation and creativity, and reducing risks associated with stagnation in a competitive market. The example of Southwest Airlines demonstrates how Strategy Canvas can help businesses create an uncontested market space and become a key player in their industry.

Therefore, businesses can benefit greatly from using Strategy Canvas to stay ahead of their competition and achieve success.

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