varunk130 Blue Ocean Strategy Canvas
Find uncontested market space instead of fighting for share in a bloody red ocean.
What this skill is
A workflow built on the Blue Ocean Strategy work of W. Chan Kim and Renée Mauborgne: map the industry value curve, identify which factors to Eliminate, Reduce, Raise, or Create (ERRC), profile the three tiers of non-customers, and design a to-be value curve that breaks the value-cost trade-off. Produces a defensible strategic move with a buyer utility map and a sequence test.
What it solves
- Strategy that benchmarks against competitors and copies their factors
- Roadmaps that compete on every dimension instead of choosing which to abandon
- Feature parity wars that erode margins
- Ignoring non-customers (the largest source of new demand)
- Confusing "different" with "differentiated" - different on dimensions buyers don't value
When to invoke
- Industry commoditization with margin compression
- Entering a market with an entrenched incumbent
- Designing a new category versus competing in an existing one
- Refreshing positioning when feature lists no longer differentiate
- Reframing strategy around buyer utility instead of competitor benchmarks
Phase 1: Map the as-is strategy canvas
The strategy canvas plots competing factors on the horizontal axis and offering level (low to high) on the vertical axis.
For each major competitor and the company:
- List the 6-12 factors the industry currently competes on (price, feature set, service levels, brand prestige, etc.)
- Score each factor 1 (low offering) to 5 (high offering)
- Plot the value curve
The as-is canvas typically shows:
- Most players hugging the same curve (convergence → red ocean)
- Industry-wide overinvestment in 1-2 factors (the standards-arms race)
- Industry-wide underinvestment in factors buyers actually care about
Phase 2: Identify non-customers (three tiers)
| Tier | Definition | Question |
|---|---|---|
| 1 - Soon-to-be | Use the industry minimally, ready to switch out | Why are they on the verge of leaving? |
| 2 - Refusing | Considered the industry, rejected it | What would have to change for them to consider? |
| 3 - Unexplored | Never considered the industry | What job are they doing instead? |
The biggest pool of latent demand is Tier 3 - non-customers who didn't realize this industry serves their job.
Phase 3: Apply the ERRC grid
For each industry factor, decide one of four actions:
| Action | Question | Effect |
|---|---|---|
| Eliminate | Which factors that the industry takes for granted can be eliminated? | Drops cost |
| Reduce | Which factors should be reduced well below industry standard? | Drops cost |
| Raise | Which factors should be raised well above industry standard? | Lifts buyer value |
| Create | Which factors should be created that the industry has never offered? | Lifts buyer value, creates new demand |
The grid is the strategic act. A canvas with only "Raise" and "Create" is unprofitable; a canvas with only "Eliminate" and "Reduce" is a discount play. You need all four.
Phase 4: Draw the to-be value curve
Re-plot the canvas with:
- Removed factors (eliminate column gone)
- Lowered factors (reduce column)
- Raised factors (raise column)
- New factors (create column)
The to-be curve must satisfy three tests:
- Focus - the curve has clear high points, not flat across all factors
- Divergence - it diverges visibly from competitor curves
- Compelling tagline - the strategy can be summarized in one sentence
If the to-be curve fails any test, iterate.
Phase 5: Buyer utility map
For the to-be offering, map utility levers across the buyer experience cycle:
Stages: Purchase → Delivery → Use → Supplements → Maintenance → Disposal
Levers: Productivity, Simplicity, Convenience, Risk, Fun and Image,
Environmental friendliness
A 6-by-6 map produces 36 cells. The current industry occupies one or two cells. Most blue oceans come from finding utility in an empty cell.
Phase 6: Sequence test (the 4 hurdles)
In order:
- Buyer utility - does the offering deliver exceptional utility?
- Strategic price - is the price attainable by the mass of target buyers?
- Cost target - can we hit the cost given the strategic price?
- Adoption hurdles - what stops customers, partners, employees, regulators from adopting?
If any hurdle fails, return to Phase 3.
Phase 7: Tipping-point execution
Identify the high-leverage actors:
- Cool spots - areas of disproportionate impact (segments, geographies, channels)
- Hot spots - bottleneck constraints to overcome first
- Key influencers - small group whose adoption tips the wider market
Sequence execution around tipping points instead of broad parallel investment.
Output
- As-is strategy canvas with company and 2-3 competitors plotted
- Non-customer tier analysis with insight per tier
- ERRC grid with at least 2 entries in each column
- To-be value curve passing focus, divergence, and tagline tests
- Buyer utility map highlighting target utility cells
- Sequence test verdict (utility, price, cost, adoption)
- Tipping-point execution plan with first 90-day moves
Operating rules
Always
- Plot at least 2 competitor value curves before your own
- Include all 4 ERRC actions
- Test against all three tiers of non-customers
- Validate the to-be curve with the focus, divergence, and tagline tests
- Run the sequence test before committing
Never
- Add factors without eliminating others
- Treat lower-priced parity as a blue ocean
- Skip non-customer analysis
- Design a curve that hugs an existing competitor's
- Confuse "first to market" with "uncontested market space"