The strategy canvas
An analytical tool that shows how much emphasis companies place on value areas in their industry.
Factors of competition are the areas that businesses within an industry provide value to customers. When the emphasis companies place on these value areas is plotted on a Strategy canvas, it creates the value curve.
Some examples of factors of competition are:
In a Red ocean, business compete by differentiating themselves with varying levels of emphasis on the factors of competition. They typically follow the value-cost trade-off where changes in emphasis on the factors result in directly proportional changes in cost - whether up or down. The most common way to differentiate is lower value and cost products vs higher value and cost products.
Blue oceans are created when companies create new factors of competition and reduce costs - value innovation.
An analytical tool that shows how much emphasis companies place on value areas in their industry.
The line on a strategy canvas showing the emphasis a company places on each factor of competition in its industry.
Crowded markets where customers have many options to choose from, resulting in cutthroat competition.
Blue oceans are markets that haven't been created yet. They are lucrative business opportunities.
Value innovation is how companies offer dramatically higher value at lower costs, escaping competition.