Strategy Canvas · ERRC Grid
Strategy Canvas & Eliminate · Reduce · Raise · Create Grid
What is a strategy canvas?
- Use a value curve to see whether you stand apart
- Four questions: Eliminate, Reduce, Raise, Create
- Cutting cost and differentiating at the same time
What a strategy canvas really changes is the nature of what gets said in meetings. When someone claims 'our after-sales service is strong,' the follow-up comes right away: 'What score is that, and what does Company B get?' Self-assessments that cannot go on the scoreboard vanish on the spot, leaving only differences in level compared with competitors on the same axis. A curve does not create a strategy. It filters out what is not one.
Aim for 5 to 12 factors. Beyond 15, every item scores about the same and the curve flattens; with 3 or 4, you only confirm what you already know. Scoring from 0 to 10 works well, and a finished curve usually takes one of three shapes: overcompetition, where every company overlaps at a high level; neglect, where all are low together; and a muddle, where rankings tangle item by item so no one has an edge. Where a positioning map asks about position on two axes, a canvas asks about the 'level offered' on many factors at once. With ERRC, the rule is to fill all four boxes. In particular, if the Eliminate box is empty, you are adding value while leaving costs unchanged, which ends in premiumization, not a blue ocean.
The most common mistake in practice is the pressure to make the curve look different. If, to look unlike others, you cut items customers treat as pass/fail conditions, such as lead time or test certificates, the curve certainly looks different, but you drop off the bid list first. Items to eliminate or reduce must be ones the industry supplies out of habit and that do not affect purchase decisions, and you should confirm that from lost-deal records, not meeting-room gut feel. It is also common to write things like 'customer delight' or 'digital transformation' in the Create box, but an item that cannot be scored cannot go on the curve. Scoring your own company 1 to 2 points too generously is the default bias, so unless you correct for it by putting the same questions to purchasing managers at client companies, the chart ends up as little more than reassurance.
John KimInstructor John Kim, CEO of Nanum Consulting and author of “B2B Marketing Design”
Kwangdong MinExpert in business models, revenue models, and market researchA core analysis tool presented by W. Chan Kim and Renée Mauborgne in Blue Ocean Strategy (2005).
Consider a hypothetical case: Company A, an industrial packaging manufacturer with 210 employees and annual revenue of about KRW 48 billion (≈ US$35,912,000). Over the past three years its operating margin fell from 7.2% to 3.1%, and six out of ten quotes ended in a request to renegotiate the unit price. The head of sales said, "Our quality is clearly different, so why are we only competing on price?" The first two days of the eight-week strategy workshop went to drawing the canvas.
- Seven salespeople reviewed the loss records for 64 deals over the past 18 months and narrowed them to the 9 factors customers actually compared: unit price, lead time, small-batch handling, test certificates, design support, inventory storage, claims handling, visit frequency, and brand.
- We scored our company and three competitors from 0 to 10, and our average was 7.4. When the same questions went to purchasing managers at 11 client accounts, it dropped to 5.9. Claims handling, which we had called a strength, was only 0.3 points apart from competitors.
- Overlaying the four companies’ curves, 7 of the 9 factors fell within 1 point of each other. The planning team lead said, "This isn’t differentiation. It’s a price war over identical specs," and the debate over defending unit prices stopped right there.
- The ERRC grid was filled in. Eliminate: regular quarterly visits and promotional items (KRW 140 million (≈ US$104,700) a year). Reduce: design support, which only 12% of customers asked for. Raise: lead time for small-batch, multi-item orders, from 14 days to 5. Create: consignment storage at customer warehouses and automated reorder integration.
- Six months later, the win rate on new quotes rose from 22% to 34%, and requests for price cuts fell by half. Nine companies signed consignment-storage contracts, and operating margin recovered to 4.6%.