Analytic tools to move from a Red Ocean Strategy to a Blue Ocean Strategy (part 3)
In this last article of this series that talks about the tools that can be used in order to achieve a blue oceans strategy in your business or entrepreneurship I am going to talk about a last tool called the ERRC Grid. In order to understand what I am writing about I recommend that you read the first two posts of this series where I present the Strategic Canvas and the Four Actions Framework. All these tools are based in what was exposed by W. Chan Kim and Renee Mauborgne in their book “Blue Ocean Strategy”.

The ERRC Grid is an analytic complement to the Four Actions Framework that was presented in the last post, which forces entrepreneurs and businessmen not just to ask themselves which are the factors that must be eliminated (E), reduced (R), raised (R) and created (C) but also to act creating new value curves. When they fill in the grid with creating and raising actions as well as with eliminating and reducing actions the companies obtain the next benefits:

  • They must seek for differentiation and low costs simultaneously pushing them not to trade off one for the other
  • It flags companies that only raise and create, because this is a common mistake in many businesses and that takes them to lift the cost structure and overengineer products and services
  • It is understood easily by managers at any level making the engage in its application
  • While they complete the grid, the companies are able to structure each competitive factor of the industry and in this way they discover many unconscious and implicit assumptions with which they have been competing traditionally.

Taking into account the example that has been presented in the other two parts of this series, I will present an example of the ERRC Grid. In order for you to understand the next table please check the chart that was exposed in the article of the Four Actions Framework.

Example ERRC Grid

Create

New Item 1 and New Item 2

Reduce

Quality, and Items 3 through 6

Eliminate Raise

Price

With this example I finish these series of articles. I hope they are useful in your business in order to shift from a red ocean strategy where all players are fighting for the same market to a blue ocean strategy where you can gain a new market.

Image taken from Flickr.com

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