How to Make a Strategy Canvas

Creating a strategy canvas is a powerful technique for visualizing your business strategy and comparing it with competitors. This method, popularized by the book "Blue Ocean Strategy" by W. Chan Kim and Renée Mauborgne, helps businesses identify their unique value proposition and strategic focus. The strategy canvas allows companies to map out their strategic position, understand the competitive landscape, and find opportunities for differentiation. Here’s a comprehensive guide on how to create an effective strategy canvas, including key steps, examples, and tips for maximizing its usefulness.

1. Understand the Concept of a Strategy Canvas

A strategy canvas is a visual tool that plots the relative performance of different companies or products against various competitive factors. The horizontal axis represents the range of factors that are important to customers, while the vertical axis shows the level of offering provided by each competitor. By using this canvas, companies can see how they stack up against competitors and identify gaps or areas where they can stand out.

2. Define Key Competitive Factors

Start by identifying the key factors that are important to your customers. These factors can include product features, pricing, customer service, convenience, and any other elements that influence customer decisions. For example, if you're in the smartphone industry, competitive factors might include battery life, camera quality, screen size, and price.

3. Map Competitors on the Canvas

Plot your company and your competitors on the canvas based on how they perform across the identified factors. Use a line graph to connect the performance levels of each company across these factors. This visual representation helps to compare and contrast how each company fares and where they excel or lag behind.

4. Analyze and Interpret the Canvas

Once you have plotted the data, analyze the canvas to identify trends and insights. Look for areas where competitors are clustered or where there are significant gaps. For instance, if all competitors offer similar features but at a high price, there might be an opportunity for differentiation through lower pricing or additional features.

5. Develop Strategic Insights

Use the insights gained from the strategy canvas to refine your business strategy. Consider how you can position your company to offer unique value in areas where competitors are weak or where there is a clear gap in the market. This might involve innovating in product features, adjusting pricing strategies, or enhancing customer service.

6. Examples of Strategy Canvas

• Example 1: Smartphone Industry - Imagine a strategy canvas comparing major smartphone brands. The factors could include battery life, camera quality, screen size, and price. By plotting these factors, you might find that while competitors offer similar camera quality, there’s a significant difference in battery life. This insight could lead to a strategic focus on enhancing battery life.

• Example 2: Fast Food Industry - In a strategy canvas for fast food chains, factors might include menu variety, speed of service, price, and healthiness of options. If the canvas reveals that most chains offer a similar menu variety but differ in healthiness, a chain could focus on offering healthier options to attract health-conscious customers.

7. Tips for Creating an Effective Strategy Canvas

• Be Thorough: Ensure that you include all relevant factors that influence customer decisions. Omitting key factors can lead to an incomplete analysis.
• Use Reliable Data: Base your plotting on accurate and up-to-date data to ensure the canvas reflects the current market conditions.
• Keep it Simple: Avoid overcomplicating the canvas with too many factors or competitors. Focus on the most impactful elements for clarity.
• Regular Updates: The competitive landscape can change rapidly. Regularly update your strategy canvas to reflect new market conditions and competitor moves.

8. Conclusion

Creating a strategy canvas is a strategic exercise that provides valuable insights into how your business compares with competitors and highlights areas for improvement. By following the steps outlined above, you can develop a clear and actionable strategy that leverages your unique strengths and addresses market opportunities. Whether you’re launching a new product or refining an existing strategy, the strategy canvas is a powerful tool to guide your decision-making and drive business success.