Why the Strategy Canvas is a brilliant tool for startup founders and B2B teams 

What is a competitor strategy canvas?

Chan Kim and Renée Mauborgne’s Strategy Canvas is a visual tool that was originally developed to help companies understand if they’re operating in a Red Ocean market, or developing a Blue Ocean solution – that’s one that has never existed before in the market (think Netflix in its re-invention of how we consume tv and media, or Yellow Tail in how we view mid-market wines). 

It’s also a tool that helps you map out the competitors in your market against set factors, to see where your product and capabilities compare so you can view, in very clear terms, where your true competitive edge lies. This isn’t just to help define your product offering, but it’s a tool that helps you set your marketing and positioning strategy.

There’s a lot more to the Strategy Canvas than what’s summarised here, but hopefully you find this a useful intro into how to see value straight away. Because once you’ve mapped it, it’s something that can be interpreted by your whole team, as well as investors and external stakeholders quite easily.

Why the Strategy Canvas is useful for B2B founders and startup teams

In the startup space, we’re juggling way too many hats. We have to keep investors happy, customers retained and ensure the product is actually working properly, all while being in a million places at once. We run so far in one direction of travel that we often don’t take a step back, take stock of that direction, and validate if it’s the right one.

The Strategy Canvas is a great tool for relatively quickly validating the direction of travel, as it forces you to focus your competitors into a small list, really evaluate what makes you truly unique.

It also helps you qualify out the wrong-fit personas, hone your messaging and ultimately reduce your sales cycles, as you’re all on the same page about your factors of differentiation, and what you want to be known for. 

While it’s usually used to frame go-to-market strategy, it’s a tool all founders and marketers should align on as it’s all about discovery. As put by the Blue Ocean team, the Strategy Canvas is about finding out three core things:

Your Focus

It forces you to find where your competitive edge is, and avoid trying to be all things to all people.

Divergence

It helps you find your value curve and differentiate yourself as much as possible from the industry standard.

A Compelling Tagline

It helps you hone a memorable, true-to-life tagline that aligns with your services and offering (ie. your tagline avoids being fluffy and says what you actually do!).

How do you use it?

Find the factors of competition in your market

Go through 3-4 market competitors – this in itself is an exercise in focussing down. You might have a list of dozens of relevant competitors, but this exercise will force you to focus on the ones that keep cropping up in your customer’s consideration set, time and time again.

Evaluate what the key factors of competition in your market are (keep these under 10 factors). For a B2B SaaS tool, these might look something like price, the number of API integrations, the variety of use cases, time-to-value, or even brand salience with your customers.

List these all out. Note down how you define each of these factors, to avoid any confusion. For example, the cheapest competitor might rank a 1 or 5 depending on customer perception of price; so be really clear about how you’re defining these terms upfront in relation to your target customer.

Map out the level of offering for each factor

The next step is to go through each of your competitors, for each of these factors, and rank their level of offering from 1-5; with 1 being the lowest level of offering, and 5 being the highest. Do the same for your company too.

Define what these factors mean in a ‘definitions list’, and also note down your reasoning for giving them that score. This reasoning will help avoid your own bias entering the discussion – by ensuring you use stats, data and as much publicly available information as you can to score them (like your competitor’s website, product reviews, features lists and more).

Map out your Strategy Canvas

Now you’re ready to go through and map each of these onto a graph (you can make a copy of the template below and give this a go yourself!)

Where you see the biggest points of divergence between yourself and your competitors emerge and where you rank highest, is where you should focus your positioning and messaging going forward. Circle where your area of focus should be, and draw an arrow to where you are actually able to level up your offering (eg. you’ve scored 4, but with a bit of product work in your roadmap, you could potentially score higher).

However, where you rank the lowest (ie. 1s and 2s) is what you should avoid prioritising in your marketing altogether. It might be tempting to see where you rank lower, and try to address these in your collateral, but this is also about ensuring consumer trust. On these low-scoring factors, you need to eliminate or reduce your focus completely, because there is no way you can compete against your competitors here and not disappoint your prospective customers.

The aim here is also not to score 5 for everything – you can’t be all things to all people. But there will be 1-3 areas where you would expect to be differentiated. And if this sounds counter-intuitive, a well known example of companies that deprioritise as a rule of thumb is Ryan Air or EasyJet.

They don’t invest in factors like ‘customer service’ or ‘comfort’ all that much; where they would probably score a 1 or 2 against airlines like British Airways or Emirates. But they probably rank a 5 on providing a low price to customers, and they’re known for being budget-friendly, and getting customers from A to B as cheaply as possible. So it’s also a strategic advantage to prioritise areas you don’t want to compete on.

What could you de-prioritise in your positioning and marketing message in order to get more focussed?

Use the competitor strategy canvas template

If you’d like to give this a go yourself, make a copy of the free Google Sheets template below (Go to File > Make a copy) then simply fill in the competitor canvas. The graph will automatically update to reflect the table data you’ve inputted. It’s nothing flashy, just a good old fashioned tool for evaluating yourself in real terms with your market.

If you’d like some strategic help in defining your factors of differentiation and carving out your focussed messaging, get in touch via bravebird.io. I’m always happy to help.

From,

Tania

PS. And if you made it to the end of the post, thank you. Your reward is this halloween-themed joke: Why did the ghost go into the bar? For the boos. 👻