A value curve is the result of plotting a company on a strategy canvas.
Red ocean value curves
When a company and its competitors have similarly shaped or converging value curves, they are likely to be in a red ocean.
Blue ocean value curves
Two of the three common traits of successful blue ocean strategies appear on a value curve. These make value curves an excellent way to identify a Blue ocean strategy. The traits are focus and divergence.
A value curve with a small number of highly emphasized factors of competition implies a strategy with focus.
Value curves on a strategy canvas that are shaped differently than the rest of their industry indicate strategies with Divergence.
Other insights from value curves
The cost of focusing on many factors of competition simultaneously needs to be justified. Good justifications for these costs include greater profits, substantial market share, and establishing or maintaining a moat to isolate against competition.
When a company is investing in features or factors of competition that provide limited incremental value for customers, the company may be over-delivering.
When a value curve shows high emphasis across many factors of competition, it’s an indicator that the company may be over-delivering without benefit.
When a company’s value curve zig-zags across the strategy canvas, it may mean they don’t have a coherent strategy.