How can a strategy canvas help identify areas of differentiation?

1 What is a strategy canvas?

A strategy canvas is a simple chart that plots the relative importance of different factors that influence customer choice and satisfaction on the horizontal axis, and the level of performance or investment on those factors by different competitors on the vertical axis. The result is a curve or line that represents the strategic profile of each competitor, showing how they allocate their resources and attention across the factors. By comparing the curves or lines, you can see the gaps and overlaps in the market, and identify the opportunities for differentiation.

2 How to create a strategy canvas?

Creating a strategy canvas involves four steps. First, you need to define the factors that matter to customers and your industry, such as features, benefits, costs, quality, or service. You can use surveys, interviews, focus groups, or secondary research to gather this information. Next, evaluate your performance and your competitors' performance on each factor. You can use a scale of 1 to 10 or any other measure that makes sense for your context. Additionally, you can use data from your own records, customer feedback, industry reports, or benchmarking studies. Then plot your curve and your competitors' curves on the strategy canvas. You can use a spreadsheet, software, or paper to draw the chart. Make sure to label the factors on the horizontal axis and the performance or investment level on the vertical axis. Finally, analyze the strategy canvas and identify areas of differentiation. Look for factors where you have a higher or lower performance or investment than competitors and where there is a gap between what customers value and what competitors offer. These are the areas where you can create a unique value proposition for customers.

3 How to use a strategy canvas for differentiation?

Once you have created and analyzed your strategy canvas, you can use it to guide your differentiation strategy in three ways: by eliminating factors that are not important to customers or over-supplied by competitors, reducing factors that are less important or over-invested by competitors, and increasing or creating factors that are highly important to customers or under-supplied by competitors. Doing so can help you reduce costs, optimize resources, focus on core competencies, enhance performance, innovate your offering, and attract more customers.

4 What are the benefits of a strategy canvas?

A strategy canvas can help you achieve a range of benefits for your differentiation strategy, such as visualizing the competitive landscape and customer preferences to reveal gaps and opportunities in the market. It can also simplify your strategy and enable you to communicate it clearly to your team, stakeholders, and customers. Additionally, it can help you align your actions and decisions with strategic goals and value proposition, as well as monitor progress and performance so that you can adjust your strategy as needed.

5 What are the challenges of a strategy canvas?

A strategy canvas is not a perfect tool, and it has some limitations and challenges that you should be aware of. It can be difficult to identify and measure the factors that matter to your customers and your industry, especially if they are intangible, subjective, or dynamic. Data on your performance and your competitors' performance can also be hard to obtain, especially if they are secretive, diverse, or changing. Relying on a single snapshot of the market can be risky and ignoring the trends, changes, and uncertainties that may affect your strategy in the future can also prove to be dangerous. Additionally, it can be tempting to copy or imitate your competitors and lose your originality, creativity, and differentiation.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?