Learn How Strategy Canvas and Benchmarking Mix
Do you want to improve your business strategy? You can learn how to use the strategy canvas and benchmarking effectively to boost your company’s success. These tools provide valuable insights into your industry and competition.
This article explores the benefits of integrating strategy canvas and benchmarking for a more informed approach to strategic planning. Whether you’re a small business or a large corporation, this knowledge can help elevate your company to new heights.
Understanding Strategy Canvas
What’s Strategy Canvas
A strategy canvas is a tool used in business strategy. It captures an organization’s current strategic landscape and future prospects. It shows an organization’s offering to buyers compared to its competitors. The canvas communicates four key elements of strategy:
- The factors of competition.
- The level of offering buyers receive across these factors.
- The organization’s and competitors’ strategic profiles.
- Cost structures
It tells a strategic story by visualizing investments made by organizations and the product, service, and delivery factors the industry competes on.
Using a strategy canvas allows businesses to understand where they and their competitors are investing. It also provides insight into the competitive landscape and the value customers receive from existing competitive offerings.
It is important to use a strategy canvas in developing and implementing business strategies. It helps organizations make informed decisions, identify areas for differentiation, increase customer value, and uncover new market space. These factors are all important for long-term success and growth.
Key Parts of a Strategy Canvas
A strategy canvas has three key parts:
- Factors of competition.
- The offering level buyers receive across these factors.
- Your own and your competitors’ strategic profiles and cost structures.
These elements are important for understanding an organization’s position in the market and its differentiation from competitors.
The strategy canvas visualizes and helps businesses comprehend where they and their competitors are investing, the product, service, and delivery factors they compete on, and what customers receive from existing competitive offerings.
By capturing this information in one simple picture, businesses gain insights into the industry and make informed strategic decisions accordingly.
It is significant to draw out how a business stands out on a strategy canvas because it helps in identifying areas of strength and weakness.
This visualization allows organizations to develop new strategies and value innovations that can set them apart in the market.
For example, Medellin’s ground-breaking public transportation system became one of its most important strategies to reduce poverty and crime through a leap in value at low cost.
Craft Your Business’s Strategy Canvas
Spot Who You’re Up Against
The “Spot Who You’re Up Against” strategy canvas has key components: competition factors, buyer offering level, strategic profiles, and cost structures.
This approach helps a business stand out by communicating its investments, product/service factors, and competitive offerings received by customers.
An example is Medellin’s ‘Metrocable’, which transformed transportation with a cost-effective cable car system, reducing poverty and crime, providing reliable rides, and attracting tourists.
The system’s unique selling point was “The price of the bus, the convenience of the train, the fun of the amusement park”, clearly communicating its benefits to citizens.
List What You’re Fighting Over
Your Strategy Canvas helps you identify the specific resources, areas, or aspects you and your competition are fighting over in the market.
It captures the current strategic landscape and the future prospects for your organization, highlighting the factors of competition and the level of offering that buyers receive.
This visual representation helps you understand where you and your competitors are currently investing, the product, service, and delivery factors the industry is competing on, and what customers are receiving.
Once you identify these points of competitive struggle, you can differentiate yourself and stand out in the market. By focusing on creating a leap in value at low cost, you can follow the lead of successful companies like Medellin, and transform yourself into a model of innovation.
Embodying what Chan Kim & Renée Mauborgne describe as “value innovation” helps you isolate key areas of competition, eliminate non-critical factors, and make strategic investments in areas that will propel you above your competition.
Check Out the Other Team
When businesses check the other team’s strategy on a Strategy Canvas, they should consider specific factors:
- Factors of competition
- The level of offering buyers receive across these factors
- Their and their competitors’ strategic profiles and cost structures.
Analyzing these factors helps businesses discover opportunities to differentiate themselves and stand out from the competition. One effective way is by creating “value innovation”, which involves providing frequent, reliable, and environmentally friendly offerings while reducing costs.
Another useful tool is a Strategy Canvas, which helps businesses understand their market and competition by examining:
- Where they and their competitors are currently investing
- The products and services that the industry is competing on
- What customers receive from existing competitive offerings.
This analysis enables businesses to identify areas for differentiation and innovation, ultimately allowing them to create blue ocean strategies that set them apart in the market.
Draw How You Stand Out
When a company wants to stand out in an industry, it should focus on offering unique value to customers. This can be achieved by innovating and creating solutions that address customer pain points and provide unmatched value. One way to do this is by developing pioneering products or services with a compelling tagline that sets them apart from traditional offerings.
An excellent example of this strategy is Medellin’s Metrocable. They repurposed chairlift technology for urban public transportation, providing a rapid, reliable, environmentally friendly, and visually stimulating ride at a low cost for both residents and tourists. This innovative approach not only transformed the transportation system but also contributed to reducing poverty and crime. It’s a great example of how to stand out in a market.
Why Use a Strategy Canvas?
A strategy canvas has many benefits for businesses. It shows the current strategic landscape and future prospects in a clear visual way. This helps companies find new opportunities and make strategic decisions. It also makes it easier for them to communicate their competitive strategy and get support from key stakeholders.
Using a strategy canvas, a company can stand out from its competitors by figuring out how to offer something different to buyers. This includes the level of offering buyers receive, the company’s and competitors’ strategic profiles, and cost structures. Companies can use this information to find unique strategic positions and meet buyer preferences in a way that sets them apart.
The canvas also gives insights into the market and competition. It shows where the company and its competitors are investing, what the industry is competing on, and what customers get from existing offerings. With this information, companies can make informed decisions about where to focus their efforts and investments to create value for customers and gain a competitive edge.
When Strategy Meets Benchmarking
Make a Map to See Your Market
A strategy canvas has four key elements. These are the factors of competition, the level of offering buyers receive, your own and your competitors’ strategic profiles, and cost structures.
Businesses should use a strategy canvas to understand where they and their competitors are investing. They need to know what product, service, and delivery factors the industry is competing on, along with what customers receive from existing competitive offerings.
To make a map and see their market, businesses should aim to create a leap in value at low cost. This is termed “value innovation” by Chan Kim & Renée Mauborgne. By doing this, businesses can set themselves apart from competitors and create a tagline that communicates the unique value they offer.
An example of a business utilizing this strategy is Medellin’s pioneering ‘Metrocable’. This form of public transportation was introduced at half the cost, leading to a rapid transformation of the city and a reduction in poverty and crime. This demonstrates the three qualities of a blue ocean strategy: focus, divergence, and a compelling tagline.
Exploring Blue Ocean Ideas
The Strategy Canvas is a useful tool. It helps in creating a compelling blue ocean strategy. This tool provides a clear picture of an organization’s position and future prospects. It focuses on factors like competition, offerings to buyers, and cost structures compared to competitors.
By using the Strategy Canvas, businesses can identify their competition. They can also highlight differentiating factors important to buyers. This tool gives insights into product, service, and delivery factors that the industry competes on. This understanding helps a business know where to invest and focus for differentiation.
Comparing strategies with competitors is crucial. It helps in understanding competitive factors and finding areas for innovation. This leads to the creation of unique value propositions.
What Your Graph Shows
The key parts of a strategy canvas incorporate the factors of competition, the offering level buyers receive across these factors, and your own and your competitors’ strategic profiles and cost structures. Using a strategy canvas, one can discern who they’re competing against by analyzing the product, service, and delivery factors within the industry.
As for what your graph shows about how you stand out in the market, it illuminates where you and your competitors are currently investing, the attributes the industry is competing on, and what customers receive from existing competitive offerings. This enables organizations to identify areas where they’re excelling or falling short, thus providing valuable insights on how to differentiate their offerings effectively.
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