The strategy canvas
An analytical tool that shows how much emphasis companies place on value areas in their industry.
The four actions framework is an analytical tool used to create new value curves on a strategy canvas that have the potential to be blue oceans.
The four actions framework is designed to facilitate thinking about these four actions: :—:
These four actions can be displayed on a grid, called the eliminate-reduce-raise-create (ERRC) grid, to provide an organized way to create an easy view of a company’s strategy.
Eliminate actions identify factors of competition that are taken for granted as required by incumbents in the industry, but could be eliminated entirely.
The benefits of eliminating factors can help a business with:
Reduce actions look at the factors of competition that can be reduced below industry standards.
Think about which factors might be inhibiting growth, but are assumed to be required by the industry.
Raise actions identify the factors of competition which should be raised above industry standards.
Challenge your assumptions about the status quo. Is there an area the industry is currently undervaluing or under-investing in? Would putting greater emphasis lead to value innovation that might help your product succeed?
Create actions are about identifying factors of competition that don’t currently exist in the industry and should be created.
This is where creativity and vision are crucial. What new factors could be created to make a blue ocean of opportunity and escape the red ocean’s competition?
An analytical tool that shows how much emphasis companies place on value areas in their industry.
Blue oceans are markets that haven't been created yet. They are lucrative business opportunities.
The factors that companies/products within an industry typically compete on to provide value to customers.
The groups of people a business aims to serve.
Value innovation is how companies offer dramatically higher value at lower costs, escaping competition.
Crowded markets where customers have many options to choose from, resulting in cutthroat competition.