Strategy canvas

Definition

A strategy canvas is a visual tool that allows businesses to compare their performance against competitors across various factors that matter to customers. It helps identify gaps in the market and opportunities for value innovation, providing a clear picture of how a company differentiates itself within its industry.

5 Must Know Facts For Your Next Test

1. The strategy canvas has two axes: the horizontal axis represents the factors of competition, while the vertical axis shows the level of offering each competitor provides.
2. By plotting a company's offering against competitors on the canvas, it becomes easy to visualize strategic positioning and identify areas where differentiation can be achieved.
3. One of the key uses of a strategy canvas is to highlight 'strategic factors' that are undervalued or overvalued in the market, revealing potential for innovation.
4. The strategy canvas is often used as part of developing a Blue Ocean Strategy, helping organizations move away from saturated markets and find new opportunities.
5. Using a strategy canvas facilitates discussions among team members about strategic choices and helps align organizational focus on value creation.

Review Questions

• How does the strategy canvas assist companies in identifying opportunities for value innovation?
  • The strategy canvas assists companies by providing a clear visual representation of how they stack up against competitors across key factors that influence customer choice. By analyzing this visual data, businesses can identify areas where competitors are over-investing or under-investing in value creation. This insight enables them to focus on factors that can be redefined or innovated upon, creating unique offerings that meet unmet customer needs and open up new markets.
• In what ways can a strategy canvas illustrate the differences between competing firms in a saturated market?
  • A strategy canvas highlights the specific attributes or factors that customers care about and shows how each firm performs in relation to those attributes. By plotting each competitor's performance, it becomes clear which areas are oversaturated with similar offerings and which are less contested. This visual comparison allows companies to recognize where they can differentiate themselves effectively, either by enhancing existing offerings or introducing entirely new ones that cater to customer preferences.
• Evaluate the impact of using a strategy canvas on strategic decision-making within organizations pursuing a Blue Ocean Strategy.
  • Using a strategy canvas significantly impacts strategic decision-making by providing a framework for analyzing competitive landscapes and uncovering new market spaces. Organizations pursuing a Blue Ocean Strategy can use this tool to visualize their strategic position and evaluate how well they are meeting customer needs compared to competitors. This analysis encourages innovative thinking and risk-taking, empowering teams to make informed decisions that shift focus from competing in crowded markets to creating unique value propositions that set them apart in untapped arenas.

Related terms

Value Proposition:

A statement that summarizes why a consumer should choose a product or service, highlighting the unique benefits it offers.

Blue Ocean Strategy:

A business approach that focuses on creating new market spaces or 'blue oceans,' making competition irrelevant by offering unique value.

Value Innovation:

The process of driving costs down while simultaneously driving value up for both the company and its customers, leading to the creation of new demand.