Strategy Canvas - A Tool For Competitive Advantage: What Is Blue Ocean Strategy?

Strategy Canvas | A Tool for Competitive Advantage
Your company might be earning high revenues and profitability today. You are certain that it will
keep growing for the next 5 years and beyond. But, what about your existing and potential
competitors?
And those new entrants who offer almost similar products and services like yours in the
market. What if they outperform you in the future?
Besides, you are also aware that several changes are being introduced in the ongoing business
trends. Your former strategies might be not in accordance with the current state of play and the
latest industry benchmarks.
How would you know your current and future position in this highly competitive and dynamic
business world?
At this point, a unique visualization strategy called “Strategy Canvas” comes into play. In the
book “Blue Ocean Strategy“ written by two eminent business theorists W. Chan Kim and Renée
Mauborgne, this new strategy was originated.
Before moving any further with a discussion on the Strategy Canvas, we need to go over the
Blue Ocean Strategy first.
What is Blue Ocean Strategy?

Blue Ocean Strategy implies that a company competing in a crowded market is always
vulnerable to pitfalls and on-and-off situations.
It can never get to that place where its competitors are unreachable. In contrast, a company

who has something quite unique and uncommon to offer usually leads to the uncontested
market space where its competitions can never reach and ultimately, competitors become
irrelevant.
The strategy emphasizes that business entities should touch on those areas in the industry
which are untapped or not discovered by any other company yet. With distinctive customer
value creation and cost-effective methods, companies can build their Blue Ocean again.
Let’s take the example of Apple’s iTunes. Apple noticed that there is a market space for digital
music. Sharing of music files was not free or even accessible till the late 1990s.
Thus, with this entirely new market idea, Apple launched iTunes in 2003 which quickly became
a huge success in the music industry. People could now easily download their favorite music for
a nominal fee with this technology.
Construct your own Blue Ocean with Strategy Canvas
Now, coming back to the strategy canvas.
This strategy helps you to explore and probe the current market space to construct your own
Blue Ocean where your competitors can never outreach, and your dominance will be lasting.
Main Features of Strategy Canvas
Strategy canvas is basically an action framework which is represented by a line graph to

pinpoint
X-axis – ‘factors of competition’

Y-axis – ‘degree of offerings’
Competing Factors are those elements in which the industry competes and invests. These
factors vary according to the nature of the business.
For example, for the airline industry,
Factors of competition are :
 meals
 prices
 lounges
 hub connectivity
 friendly service
 speed etc.
For the hotel industry,
Competing Factors would be:
 room size
 furniture
 restaurants
 architecture
 price
 receptionist
 quality services.
These all factors should be plotted on a horizontal axis to highlight the current areas in which
the company is currently investing and also the potential areas where it can create new
customer value in the future.
On the opposite side in a vertical axis, the offering level or the degree to which a company
invests in each factor, alongside its competitors’ offering is to be plotted.
These are marked as ‘High’ and ‘Low’.
The more a company invests in a specific factor, the higher a point will be marked at ‘Offering
Level’ and vice-versa.
How to create Strategy Canvas graph

This graph is very easy to create. All you need to do is plot points according to your current
organizational performance and your competitors’ performance.
Draw a point in those factors you are currently investing and at how much extent you make your
offerings in that area to your customers.
Subsequently, connect all the points through a line that displays a value curve of your and your
competitors’ companies.
What this Graph represents

This graph allows you to take innovative advantages out of it. It gives you three primary
information pieces which are shown below:
1. It allows you to see the current market scenario and industry benchmarks along with
your competitors. Here, you will be able to answer the following:
o What is your position?
o What is your competitors’ position?
o Do your strategies differ from your competitors’ or are both of you on the same
page?
2. It tells you where you and your competitors’ strategies diverge:
o In which areas are you different from your competitors?
o How significant is the difference?
3. It enables you to realize the empty spaces where new opportunities can be built:
o How more innovative can you become?
o What new competitive differentiation can you bring?
o How can you reach untapped areas where no competitor has gone so far?
o How can you target more customers?
Thus, with this depiction, you will be able to understand where your company is heading to and
how can you improve those areas where you see lacking.
Besides, you can focus on developing your Unique Selling Proposition (USP) which is offered
by no one. You can also create a niche market where no or only a few companies exist.
Example of Strategy Canvas
How Southwest Airlines differentiated their Strategy through Strategy Canvas
Southwest Airlines knew that prices, meals, seating choices, and hub connectivity are those
general areas where every company is investing and doing well. Although these are the
common benchmarks, ‘frequent departures’ is the factor which is untapped and can be made
as a competitive strategy.
Besides, some customers travel frequently.
Thus, Southwest Airlines reduced the costs on meals, hub connectivity and other general
factors and invested mostly on its frequent departure factor along with friendly services and
speed. Eventually, the prices decreased, and customers started to prefer Southwest Airlines
due to low prices over others.
The grey line in the above chart portrays Southwest Airlines. You can see that the factor of
frequent departure is placed at a high offering.
This factor was not thought by any other airline company before. By providing frequent
departures for a few routes supplied by Airlines, the company made a Blue Ocean move and
earned an amazing differentiated and unreachable position.
So now, with strategy canvas, you can tell how long you will sustain in the market!

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Strategy Canvas | A Tool for Competitive Advantage

What is Blue Ocean Strategy?

It can never get to that place where its competitors are unreachable. In contrast, a company

Main Features of Strategy Canvas

Strategy canvas is basically an action framework which is represented by a line graph to

X-axis – ‘factors of competition’

For example, for the airline industry,

Factors of competition are :

For the hotel industry,

Competing Factors would be:

These are marked as ‘High’ and ‘Low’.

How to create Strategy Canvas graph

What this Graph represents

How Southwest Airlines differentiated their Strategy through Strategy Canvas

Besides, some customers travel frequently.

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