How can you inspire a natural wake-up call in your team or in your organisation about the current state of play in your industry sector? How can you show a clear picture of the current competitive landscape?
When people see what is the strategic reality is, more ready to agree on the need for change and make a real shift.
From another perspective market share is important, and obviously most organisations want more of it, but market share is a lagging indicator as it is a reflection of past not future. Market leaders can easily and unnoticeably become arrogant and pull a blindfold which has serious consequences. For example Blackberry and Kodak had strong market shares and their strategic focus was very much on the present and avoided preparing for the future. And we’ve seen that happened.
Drawing your ‘as-is strategy canvas’ speaks a lot about where do you place your value, how unique your services and products are compared to your competitors. You can have a hugely large market share and at the same time still have high strategic vulnerability. It clearly speaks about your strategy being more present instead of future focused.
Let’s have a look at the Strategy Canvas of Cirque du Soleil by Renée Mauborgne and W. Chan Kim, creator of the Blue Ocean Strategy concept.
Horizontal axis: Factors the industry competes on and invests in and what the strategic profiles of the major players are.
Vertical axis: Capture the offering level that buyers receive across all of these key competing factors.
As you can see from this example.
Cirque du Soleil revolutionized the circus industry. Its blue ocean strategic move challenged the conventions of the circus industry. According to a case study Cirque’s productions have been seen by more than 150 million spectators in more than 300 cities around the world. In less than twenty years since its creation, Cirque du Soleil achieved a level of revenues that took Ringling Bros. and Barnum & Bailey—the once global champion of the circus industry—more than one hundred years to attain. They omitted some of the key competitive factors such as animal shows (not to fight with animal rights activists), star performers (instead to focus more on team work), multiple show arenas (to have a much larger and more spectacular theatre set up). Introduced elements from other industries such as artistic music and dance, refined viewing environment and effects, and theatrical themes.
Another compelling aspect of Cirque du Soleil’s success is that it did not win by taking customers from the already shrinking circus industry, which historically catered to children. Instead it created uncontested market space that made the competition irrelevant. It appealed to a whole new group of customers: adults and corporate clients prepared to pay a price several times as great as traditional circuses for an unprecedented entertainment experience.
Draw your own ‘As is Strategy Canvas’!
- What are the factors your industry competes on?
- What is the offering level of your key competitors on each of the factors?
- What is your offering level?
- What differentiates you from your competitors according the canvas?
- Where else could you gain competitive advantage going forward?
- Is your strategy past or future focused?
I find this exercise very fascinating as it always generates eye-opening discussions in leadership and management teams.
Source: Blue Ocean Strategy & Blue Ocean Shift by professors W. Chan Kim and Renée Mauborgne