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:
- Technical specs
- Ease of use
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.