A Strategy Canvas is a simple, visual, and strategic planning tool that business leaders can use to compare their competitive factors against other companies that target the same customers. By identifying where your customer receives value and how your value proposition stands up against competitors in your industry, you can be inspired to create new products or services that meet the unique needs of your customer or you can gain insights about untapped markets. W. Chan Kim and Renée Mauborgne created the Strategy Canvas with the idea that longevity and success come from building an unsaturated market (not from competing in a saturated one). This line graph provides a snapshot of your current position in an industry and points you in the direction of competitive factors that are worth your attention.
The Strategy Canvas tells a story that companies can use to develop or improve on a competitive strategy (with a focus on what their customers care about most), create a value proposition to set them apart from competitors, discover new ways to provide value to their demographic, and cut down on operating costs by eliminating factors that matter less in a customer’s buying decision. This tool is clear, informative, and a strategic source of new business opportunities.
A Strategy Canvas is presented as a simple, two-dimensional line graph. The competitive factors of a business are compared against how much value each factor delivers to the customer. The competitive factors are charted horizontally and the degree of value is charted vertically. A company can determine which competitive factors are important to assess.
List your competitors. This could include competitors in the same market or solutions that meet the same need for your customer. Consider these questions:
Determine your competitive factors. Compile a list of factors that deliver value to your customer (usually up to 10). To compile an effective list, it is helpful to perform market research or brainstorm with key players in your organization; an effective list will include price along with other factors that reflect what your customer's values. Consider these questions:
Measure the value of each of your competitive factors by ranking them or assigning them a number. You can even create your own ranking system. For example, use 0%-100% with each number representing a different degree of value on the scale.
Prepare your Strategy Canvas. On the horizontal axis, plot the first competitive factor (price) and then list the remaining factors to the right and along the horizontal axis. On the vertical axis, plot the ranking system you will use to measure the value of each.
Plot the value you deliver for each competitive factor. Then, do the same for each of your competitors included in this analysis. Consider these questions:
Formulate a strategy. Now that you have a snapshot of what opportunities exist for delivering value to your customer and how your value proposition stands up against competitors, you can use this data to develop a business plan, revise a competitive strategy, or research a new business idea. Consider these questions:
