# Strategy Canvas

The strategy canvas is the central diagnostic and action framework of blue ocean strategy. It captures the current state of play in an industry, shows where competitors invest, and reveals opportunities to create new market space. This reference provides step-by-step instructions for creating, reading, and using strategy canvases.


## Table of Contents
1. [What a Strategy Canvas Shows](#what-a-strategy-canvas-shows)
2. [Step-by-Step: Creating a Strategy Canvas](#step-by-step-creating-a-strategy-canvas)
3. [Reading the Canvas: What Curve Shapes Mean](#reading-the-canvas-what-curve-shapes-mean)
4. [Strategy Canvas Templates for Common Industries](#strategy-canvas-templates-for-common-industries)
5. [Before/After Strategy Canvas Examples](#beforeafter-strategy-canvas-examples)
6. [Common Mistakes When Creating Strategy Canvases](#common-mistakes-when-creating-strategy-canvases)
7. [Using the Strategy Canvas in Team Workshops](#using-the-strategy-canvas-in-team-workshops)
8. [Digital Tools for Strategy Canvas Creation](#digital-tools-for-strategy-canvas-creation)
9. [Strategy Canvas Checklist](#strategy-canvas-checklist)

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## What a Strategy Canvas Shows

A strategy canvas is a one-page visual that plots:

- **Horizontal axis:** The key competing factors the industry invests in and competes on
- **Vertical axis:** The offering level buyers receive across each factor (low to high)
- **Value curves:** Lines connecting the dots for each competitor or strategic group

When all competitors' value curves have the same shape, the industry is a red ocean. When a company's curve is fundamentally different, it has found (or created) a blue ocean.

## Step-by-Step: Creating a Strategy Canvas

### Step 1: Define the Industry Scope

Before listing factors, clarify what industry or category you are mapping. Be specific.

**Good scope definitions:**
- "Mid-range casual dining restaurants in the U.S."
- "B2B project management software for teams of 10-50"
- "Personal fitness solutions for women aged 30-50"

**Poor scope definitions:**
- "Food industry" (too broad)
- "Software" (too broad)
- "Our direct competitor" (too narrow)

### Step 2: Identify Competing Factors

List every factor the industry competes on and that buyers use to make decisions. Include both explicit (price, features) and implicit (brand prestige, emotional appeal) factors.

**Methods for identifying factors:**

| Method | How | What It Reveals |
|--------|-----|-----------------|
| Competitor analysis | Study marketing materials, pricing, features of top 5-8 players | What the industry thinks matters |
| Customer interviews | Ask 10-15 customers what they consider when buying | What buyers actually evaluate |
| Review mining | Analyze 100+ reviews for recurring themes | What drives satisfaction and complaints |
| Sales team input | Ask sales reps what objections and comparisons they hear | What factors influence purchase decisions |
| Industry reports | Read analyst reports and trade publications | What metrics the industry tracks |

**Aim for 8-14 factors.** Fewer than 8 may miss important dimensions. More than 14 becomes unwieldy.

### Step 3: List and Order the Factors

Arrange factors on the horizontal axis in a logical order. Common orderings:

- **By category:** Price factors, product factors, service factors, brand factors
- **By buyer journey:** Discovery, evaluation, purchase, use, support
- **By importance:** Most to least important (based on customer research)

### Step 4: Rate Each Player

For each competitor (or strategic group), rate the offering level on each factor as Low, Medium-Low, Medium, Medium-High, or High. Use a 1-5 scale.

**Rating guidelines:**

| Rating | Meaning |
|--------|---------|
| 1 (Low) | Minimal or no investment in this factor |
| 2 (Medium-Low) | Below industry average |
| 3 (Medium) | Industry average |
| 4 (Medium-High) | Above industry average |
| 5 (High) | Industry-leading investment in this factor |

**Important:** Rate based on the actual offering level, not what the company claims. Use customer perception, not internal metrics.

### Step 5: Plot the Canvas

Draw the canvas with factors on the x-axis and offering levels (1-5) on the y-axis. Connect each player's dots to form their value curve.

**Text-based format for digital collaboration:**

```
Factor              | Player A | Player B | Player C | Blue Ocean
--------------------|----------|----------|----------|----------
Price               |    3     |    4     |    2     |    4
Feature depth       |    4     |    3     |    5     |    1
Ease of use         |    2     |    2     |    2     |    5
Customer support    |    3     |    4     |    3     |    2
Customization       |    4     |    3     |    5     |    1
Speed to value      |    1     |    2     |    1     |    5
Community           |    1     |    1     |    2     |    5
Integration breadth |    4     |    3     |    4     |    2
```

### Step 6: Analyze the Canvas

Look for these patterns in the current state.

## Reading the Canvas: What Curve Shapes Mean

### Convergent Curves (Red Ocean Signal)

When all competitors' curves roughly overlap, the industry is in a red ocean. Companies are competing on the same factors at similar levels. This is the most common pattern and the biggest opportunity for blue ocean creation.

**What to do:** Apply the ERRC grid aggressively. The convergence means the industry has defined "good" narrowly, leaving room for a divergent approach.

### The "More for More" Curve

One player scores high on every factor, at a premium price. This is a differentiation strategy, not value innovation. It is expensive to sustain and vulnerable to a blue ocean entrant who eliminates the factors that do not matter.

**What to do:** Ask which of those "high" factors buyers would willingly trade away for something new.

### The Zigzag Curve

A player scores high on some factors and low on others without a clear strategic logic. This usually indicates an unfocused strategy driven by reactive decisions.

**What to do:** Identify whether the highs and lows reflect a coherent buyer need. If not, the company is vulnerable.

### The Divergent Curve (Blue Ocean Signal)

One player's curve has a fundamentally different shape: low where others are high, high where others are low, and peaks on factors others do not even have. This is the signature of a blue ocean strategy.

**Characteristics of a strong divergent curve:**
- **Focus:** High on only 3-4 factors (not trying to be good at everything)
- **Divergence:** Clear difference from industry norm
- **Compelling tagline:** The strategy can be summarized in one memorable phrase

## Strategy Canvas Templates for Common Industries

### SaaS / Software

Typical competing factors:
- Price / Total cost of ownership
- Feature depth
- Ease of use / Time to value
- Customization / Configuration
- Integration ecosystem
- Customer support quality
- Security / Compliance
- Brand / Market reputation
- Scalability
- Mobile experience

### Retail / E-Commerce

Typical competing factors:
- Price
- Product selection breadth
- Product quality
- Shopping experience
- Delivery speed
- Return policy
- Customer service
- Brand prestige
- Loyalty program
- Store / Website design

### Professional Services

Typical competing factors:
- Hourly / Project rate
- Expertise depth
- Team size
- Industry specialization
- Response time
- Deliverable quality
- Relationship / Account management
- Geographic presence
- Technology tools
- Brand reputation

### Healthcare / Wellness

Typical competing factors:
- Cost to patient
- Wait time
- Clinical outcomes
- Patient experience
- Accessibility (locations, hours)
- Technology (telehealth, apps)
- Specialization depth
- Insurance acceptance
- Preventive care focus
- Follow-up / Continuity

## Before/After Strategy Canvas Examples

### Example: Budget Hotel Industry

**Before (Red Ocean):**

```
Factor              | Economy Hotels | Mid-Range Hotels | Motels
--------------------|----------------|------------------|--------
Price               |      4         |       2          |   5
Room quality        |      2         |       4          |   1
Restaurant          |      1         |       4          |   1
Lobby aesthetics    |      1         |       4          |   1
Room size           |      2         |       4          |   2
Front desk service  |      3         |       4          |   2
Amenities (pool)    |      1         |       4          |   1
Bed quality         |      2         |       3          |   1
Hygiene             |      3         |       4          |   2
Quietness           |      2         |       3          |   2
```

**After (Blue Ocean: Formule 1 / citizenM-style):**

```
Factor              | Industry Avg | Blue Ocean Hotel
--------------------|--------------|------------------
Price               |      3       |       4
Room quality        |      2       |       2
Restaurant          |      2       |       1
Lobby aesthetics    |      2       |       5
Room size           |      3       |       1
Front desk service  |      3       |       1
Amenities (pool)    |      2       |       1
Bed quality         |      2       |       5
Hygiene             |      3       |       5
Quietness           |      2       |       5
Self-service tech   |      1       |       5
Design / Instagram  |      1       |       5
```

**What changed:** Eliminated full-service expectations (restaurant, front desk, room size). Raised the factors that actually matter to tired travelers (bed quality, hygiene, quietness). Created new factors (self-service tech, design-forward spaces).

### Example: Online Education

**Before (Red Ocean):**

```
Factor              | Traditional LMS | MOOC Platforms | Bootcamps
--------------------|-----------------|----------------|----------
Price               |      1          |      5         |    2
Content depth       |      4          |      4         |    3
Certification value |      4          |      2         |    3
Interactivity       |      2          |      1         |    4
Career outcomes     |      3          |      1         |    4
Self-paced          |      3          |      5         |    1
Community           |      1          |      1         |    4
Instructor access   |      3          |      1         |    4
Content freshness   |      2          |      3         |    4
```

**After (Blue Ocean: Cohort-Based Course):**

```
Factor              | Industry Avg | Cohort-Based Course
--------------------|--------------|---------------------
Price               |      3       |       2
Content depth       |      4       |       2
Certification value |      3       |       1
Interactivity       |      2       |       5
Career outcomes     |      3       |       5
Self-paced          |      3       |       1
Community           |      2       |       5
Instructor access   |      3       |       5
Content freshness   |      3       |       5
Accountability      |      1       |       5
Peer network        |      1       |       5
```

**What changed:** Eliminated self-pacing and certification (factors with low buyer impact). Created accountability and peer networking (factors that drive actual learning outcomes).

## Common Mistakes When Creating Strategy Canvases

### Mistake 1: Using Internal Metrics Instead of Buyer Perception

Companies often rate themselves based on what they know internally ("We have 500 features!") rather than how buyers perceive the offering. Always rate from the buyer's perspective.

**Fix:** Validate ratings with customer interviews or surveys. If customers rate your "feature depth" as medium despite having 500 features, your canvas should say medium.

### Mistake 2: Too Many Factors

Including 20+ factors makes the canvas unreadable and dilutes strategic insight. The goal is to capture the factors that drive competitive dynamics and buying decisions.

**Fix:** Limit to 8-14 factors. Combine related factors. Eliminate factors that do not influence buyer choice.

### Mistake 3: Missing Implicit Factors

Industries compete on factors that are never explicitly discussed: emotional safety, social signaling, ease of switching, time investment. These implicit factors often hold the key to blue ocean opportunities.

**Fix:** Include at least 2-3 implicit/emotional factors alongside functional ones.

### Mistake 4: Rating Everything as "Medium"

When in doubt, teams default to rating everything as 3 out of 5. This produces flat, uninformative curves that obscure real strategic differences.

**Fix:** Force-rank: at least 2 factors must be rated 1-2 and at least 2 must be rated 4-5 for each player.

### Mistake 5: Drawing the Desired State Without ERRC Discipline

Teams jump to "raise everything and create new factors" without eliminating or reducing anything. This produces a "more for more" curve that is not value innovation.

**Fix:** Enforce the rule: for every factor you raise or create, you must eliminate or reduce at least one factor.

### Mistake 6: Confusing Strategy Groups with Individual Companies

In industries with many players, mapping every individual company creates noise. Group similar competitors into strategic groups and map the group average.

**Fix:** Identify 3-5 strategic groups (e.g., "premium players," "value players," "niche specialists") and draw one curve per group.

## Using the Strategy Canvas in Team Workshops

### Workshop Format: Strategy Canvas Creation (3 hours)

**Participants:** 6-12 people from cross-functional teams (product, sales, marketing, operations, customer success)

**Materials:** Whiteboard or digital canvas tool, sticky notes, marker pens

**Agenda:**

| Time | Activity | Output |
|------|----------|--------|
| 0:00-0:20 | Introduction to strategy canvas concept | Shared understanding |
| 0:20-0:50 | Brainstorm competing factors (individual then group) | Factor list (15-20 items) |
| 0:50-1:10 | Prioritize and consolidate to 10-12 factors | Final factor list |
| 1:10-1:30 | Break | - |
| 1:30-2:00 | Rate competitors on each factor (silent voting then discussion) | Competitor ratings |
| 2:00-2:20 | Rate your own company (silent voting then discussion) | Self-assessment ratings |
| 2:20-2:40 | Draw the canvas and analyze patterns | Current-state canvas |
| 2:40-3:00 | Identify blue ocean opportunities (divergence brainstorm) | Opportunity shortlist |

**Facilitation tips:**
- Use silent individual brainstorming before group discussion to avoid groupthink
- When rating, have each person write their rating on a sticky note and reveal simultaneously
- If there is wide disagreement on a rating, discuss and use the customer-facing team's perspective as tiebreaker
- Photograph or digitize the canvas immediately after the session

### Follow-Up: From Canvas to Action (2 hours, 1 week later)

| Time | Activity | Output |
|------|----------|--------|
| 0:00-0:15 | Review current-state canvas | Alignment |
| 0:15-0:45 | Apply ERRC: What to eliminate, reduce, raise, create? | ERRC grid |
| 0:45-1:15 | Draw the proposed blue ocean value curve | Target-state canvas |
| 1:15-1:45 | Stress-test: Would non-customers buy this? Can we achieve the cost? | Validation notes |
| 1:45-2:00 | Define next steps and owner for each ERRC action | Action plan |

## Digital Tools for Strategy Canvas Creation

| Tool | Best For | Cost |
|------|----------|------|
| Miro / FigJam | Collaborative workshops, remote teams | Free tier available |
| Google Sheets | Simple data entry and chart generation | Free |
| PowerPoint / Keynote | Polished presentations of final canvas | Included with office suites |
| Canvanizer | Dedicated strategy canvas tool | Free |
| Strategyzer | Full strategy toolkit (canvas + business model) | Paid |

### Google Sheets Quick Setup

1. Create a spreadsheet with factors as rows
2. Add columns for each competitor and your proposed offering
3. Rate each cell 1-5
4. Select all data and insert a radar chart or line chart
5. Format: competitors in gray/muted colors, your proposed curve in bold color

### Tips for Digital Canvases

- Always include a legend explaining what the ratings mean
- Use color coding: red for factors to eliminate, orange for reduce, green for raise, blue for create
- Save versioned copies as the strategy evolves
- Include the date on every canvas (strategies age quickly)

## Strategy Canvas Checklist

Before finalizing your strategy canvas, verify:

- [ ] Factors represent buyer-perceived value, not internal metrics
- [ ] 8-14 factors are included (not too few, not too many)
- [ ] Both functional and emotional factors are represented
- [ ] At least 3 competitors or strategic groups are plotted
- [ ] Ratings are validated by customer-facing team members
- [ ] Your proposed curve is divergent (not parallel) to competitors
- [ ] Your proposed curve is focused (high on 3-4 factors, not everything)
- [ ] You can describe your strategy in one compelling tagline
- [ ] The canvas has been reviewed by someone outside the team for blind spots
- [ ] The ERRC grid is consistent with the curve (eliminate = low, create = high)
