---
name: errc-strategy-canvas
description: Builds a strategy canvas and an ERRC grid (Eliminate, Reduce, Raise, Create) for one offering - lists the factors an industry competes on, scores the industry's offering level on each, asks the four questions of every factor, draws the proposed value curve beside the industry's, and tests it for focus, divergence, and a truthful tagline before naming the first tests. Use when someone asks for an ERRC grid template or example, a strategy canvas or value curve, the four actions framework, how to stand out in a crowded market, how to stop competing on the same features as everyone else, or a blue ocean style analysis of a product or service.
---

# ERRC grid and strategy canvas

The strategy canvas shows what an industry competes on and how much of each thing buyers get: competing factors run along the horizontal axis, the offering level on the vertical axis, and each player's line across them is its value curve. The ERRC grid then asks four questions of every factor: which to eliminate, which to reduce well below the industry's standard, which to raise well above it, and which to create because the industry has never offered them. W. Chan Kim and Renée Mauborgne developed both tools and set them out in the book Blue Ocean Strategy (Harvard Business School Press, 2005; later expanded editions), after a series of HBR articles running from "Value Innovation: The Strategic Logic of High Growth" (1997), where the value curve first appeared, to "Blue Ocean Strategy" (October 2004). The aim is a new value curve that breaks the trade-off between differentiation and low cost, instead of a better copy of the industry's curve. The book's own cases (Cirque du Soleil among them) are not repeated here; this skill applies the method to the user's offering.

## When to use

- A product or service competes on the same features and price as everyone else, and margins are thin.
- The team keeps adding features to match rivals and costs keep rising.
- Before a relaunch, a new tier, or a new offer for people who don't buy from the industry today.
- Preparing a strategy offsite where the question is "how are we different, and what do we stop doing?".
- Not for judging whether an industry is profitable (use five-forces-analysis), not for picking between cost leadership and differentiation as a stance (use generic-strategy-choice), and not for a one-line positioning statement once the strategy is set (use positioning-statement).

## What you need

- The offering and the industry or group of rivals it is compared with. If unclear, ask once: "Which rivals or alternatives does a buyer compare you with?"
- The factors the industry competes on and invests in, from the buyer's side (price, range, speed, service, location, and so on). If the user gives none, propose a list from what they wrote and ask them to correct it.
- Evidence about buyers: interviews, reviews, complaints, sales notes, churn reasons. And about noncustomers: people who could buy but use another solution or do without, and why.
- Rough cost effects of each factor, if known (what each one costs to provide).
- The decision this serves (relaunch, new tier, enter a segment). If missing, write "[decision: to confirm]".
- Never invent market data, scores, or prices. Offering levels are judgments; say whose judgment they are and mark weak ones "[check: ...]".

## Steps

1. **Fix the frame.** Write in one sentence the offering, the buyer, and the set of rivals or alternatives being compared. A canvas that mixes strategic groups (a budget chain and a luxury hotel) hides the pattern. If the user wants several groups, make a separate column for each.
2. **List the competing factors.** Write 5 to 12 factors the industry competes on and spends money on, named as a buyer would name them ("wait time", not "queue management system"). Merge duplicates and drop internal processes the buyer never sees. Ask the user to confirm the list before scoring.
3. **Score the industry's curve.** Give each factor an offering level on a 1 to 5 scale (1 = little or none, 5 = the most anyone offers) for the typical rival, and for one or two named rivals if the user has facts. Write the evidence or the source of each judgment in a note. Flat, parallel curves are the usual finding: they show that rivals compete on the same things.
4. **Look at buyers and noncustomers.** From the evidence, mark which factors buyers ignore, complain about, or pay for without wanting. Then write why noncustomers stay away, and what they use instead. Kim and Mauborgne's canvas shifts attention from rivals to alternatives and from customers to noncustomers; a factor that drives noncustomers away is a candidate for reduce or eliminate.
5. **Ask the four questions of every factor.** For each factor, decide eliminate, reduce, keep, or raise, and add factors to create. Keep the reason for each move, tied to the evidence from step 4. The grid must have entries in Eliminate or Reduce, not only Raise and Create: raising and creating alone adds cost and leads to an over-built offering.
6. **Draw the proposed curve beside the industry's.** Put both curves in one table, factor by factor, with created factors added at the end (industry level 0). Show the direction of each change.
7. **Run the three checks.** Kim and Mauborgne name three qualities of a good value curve. Focus: the curve puts effort on a few factors, not on everything. Divergence: its shape departs from the industry's curve instead of sitting above or below it. A compelling tagline: one short line says what the curve offers and is true. Write the tagline; if you can't write a true one, the curve isn't clear yet. Mark each check pass or fail with the reason.
8. **Note cost and risk.** For each move, write the cost effect (down, up, flat, or "[check: ...]"). Then name the two or three assumptions the new curve depends on most, such as "buyers will give up office visits".
9. **End with decisions and first tests.** Answer the decision in one paragraph. List the first tests of the riskiest assumptions, each small and cheap (five calls, a landing page, a pilot with three customers), with an owner and a date if the user gave names.

## Output format

```markdown
# Strategy canvas and ERRC grid: [offering]
**Decision this serves:** [decision] · **Compared with:** [rivals or alternatives] · **Prepared for:** [name or team] · **Date:** [date]

## Frame
[One sentence: offering, buyer, rivals compared.]

## Strategy canvas
Offering level, 1 = little or none, 5 = the most anyone offers. Scores are [whose judgment].

| Competing factor | Industry today | [Named rival, optional] | Proposed | Change | Evidence |
|---|---|---|---|---|---|
| [factor] | [1–5] | [1–5] | [0–5] | Eliminate / Reduce / Keep / Raise | [source or "[check: ...]"] |
| [new factor] | 0 | 0 | [1–5] | Create | |

## Buyers and noncustomers
- Buyers ignore or dislike: [factors, with evidence]
- Noncustomers: [who they are], stay away because [reason], use [alternative] instead

## ERRC grid
| Eliminate | Reduce |
|---|---|
| [factor]: [reason] | [factor]: [reason] |
| **Raise** | **Create** |
| [factor]: [reason] | [factor]: [reason] |

## Three checks
| Check | Pass / fail | Why |
|---|---|---|
| Focus | | |
| Divergence | | |
| Compelling tagline | | Tagline: "[line]" |

## Cost and risk
| Move | Cost effect | Assumption it depends on |
|---|---|---|

## Decision and first tests
[One paragraph answering the decision.]
- [ ] [Test of the riskiest assumption], [owner], [date]
```

## Example

**Input:** "We're Ledgerline, a two-person bookkeeping firm in Portland. We want a new offer for independent restaurants and need to decide by month end whether to relaunch around it. Local bookkeeping firms all compete on the same things: broad services (bookkeeping, payroll, tax filing, advisory), monthly in-person review meetings, a downtown office, a long monthly report pack (often 20+ pages), month-end close about 3 weeks after month end, general (not restaurant-specific) knowledge, and price — quotes we've seen are around $400 a month for a small restaurant. We interviewed 12 restaurant owners. 9 said they never read the monthly pack. 10 said what they want is food cost % and labour cost % every week, because by the time the monthly numbers arrive it's too late to fix the menu or the rota. 7 hate dropping off receipts and meeting at the office during service hours. 4 of the 12 do their own books in a spreadsheet because firms cost too much; they file taxes through a CPA anyway. We can pull sales and labour data from the two POS systems most of them use. We have a CPA we already refer tax work to. We don't know what price restaurants would pay."

**Output:**

```markdown
# Strategy canvas and ERRC grid: Ledgerline's offer for independent restaurants
**Decision this serves:** relaunch around a restaurant offer by month end? · **Compared with:** local bookkeeping firms in Portland · **Prepared for:** Ledgerline · **Date:** [date]

## Frame
Bookkeeping for independent restaurants in Portland, compared with general local bookkeeping firms and with owners doing their own books in a spreadsheet.

## Strategy canvas
Offering level, 1 = little or none, 5 = the most anyone offers. Scores are Ledgerline's judgment from the interviews and the quotes it has seen.

| Competing factor | Industry today | Proposed | Change | Evidence |
|---|---|---|---|---|
| Breadth of services | 5 | 2 | Reduce | Owners file taxes through a CPA anyway (4 of 12 interviews); Ledgerline already refers tax work |
| Monthly in-person meetings | 4 | 0 | Eliminate | 7 of 12 dislike meeting during service hours |
| Downtown office | 4 | 0 | Eliminate | Owners don't want to come in during service hours (7 of 12) [check: whether any owner values the office] |
| Length of monthly report pack | 5 | 1 | Reduce | 9 of 12 never read it |
| Speed of numbers | 2 | 5 | Raise | 10 of 12 want weekly figures; close today takes about 3 weeks |
| Restaurant-specific knowledge | 2 | 5 | Raise | Owners want food and labour cost %, restaurant measures |
| Price | 3 | [check: test price] | Reduce [check] | Quotes about $400 a month; price restaurants would pay unknown |
| Weekly food and labour cost % from the POS | 0 | 5 | Create | 10 of 12 asked for it; POS data available |
| No receipt drop-off (photo or POS feed) | 0 | 4 | Create | 7 of 12 hate dropping off receipts |

## Buyers and noncustomers
- Buyers ignore or dislike: the monthly pack (9 of 12), office meetings and receipt drop-off (7 of 12).
- Noncustomers: owners who keep their own books in a spreadsheet (4 of 12), stay away because firms cost too much, and use a spreadsheet plus a CPA for taxes instead.

## ERRC grid
| Eliminate | Reduce |
|---|---|
| Monthly in-person meetings: owners can't leave service | Breadth of services: tax filing goes to the partner CPA |
| Downtown office: owners don't want to come in [check] | Report pack: one page, two numbers first |
| | Price: below the $400 quotes [check: test price] |
| **Raise** | **Create** |
| Speed: weekly figures, not a 3-week close | Weekly food and labour cost % pulled from the POS |
| Restaurant knowledge: restaurant measures and benchmarks [check: benchmark source] | Receipts by photo or POS feed, no drop-off |

## Three checks
| Check | Pass / fail | Why |
|---|---|---|
| Focus | Pass | Effort goes to speed, restaurant measures and the weekly numbers; breadth, meetings and the pack are cut |
| Divergence | Pass | The curve drops where the industry is high (services, meetings, pack) and rises where it is low (speed, restaurant knowledge) |
| Compelling tagline | Pass, if the POS pull works for both systems | Tagline: "Your food and labour cost, every week." |

## Cost and risk
| Move | Cost effect | Assumption it depends on |
|---|---|---|
| Eliminate meetings and office | Down | Owners trust a firm they never meet in person |
| Reduce services and pack | Down | Owners accept tax filing through the partner CPA |
| Weekly numbers from the POS | Up at first [check: setup time per restaurant], then flat | The data from both POS systems is complete enough |
| Lower price | Down on revenue | Spreadsheet owners would pay [check: amount] |

## Decision and first tests
The interviews support a relaunch around a narrow restaurant offer: fewer services, no meetings, and weekly food and labour cost numbers. The open questions are price and whether the POS data is good enough, so we recommend deciding at month end after two tests, not before.
- [ ] Pull four weeks of data from both POS systems for two of the interviewed restaurants [check: who agrees] and compute the two numbers, Ledgerline, [date]
- [ ] Offer the weekly report to the 4 spreadsheet owners at two test prices and record yes or no, Ledgerline, [date]
```

## Checks before you send

- [ ] The frame names the buyer and the rivals or alternatives compared.
- [ ] Factors are named from the buyer's side, and the user confirmed or corrected the list.
- [ ] Every score says whose judgment it is, and weak ones are marked "[check: ...]".
- [ ] The ERRC grid has at least one Eliminate or Reduce entry, and every move has a reason tied to evidence.
- [ ] Focus, divergence, and a true tagline are each marked pass or fail with a reason.
- [ ] Every number comes from the input or is marked "[check: ...]".
- [ ] It ends with an answer to the decision and small first tests of the riskiest assumptions.

## Common mistakes

- Listing only Raise and Create. That builds a more expensive version of the industry's curve, not a new one.
- Scoring factors from the company's own view ("our CRM integration") instead of what buyers notice.
- Comparing with the wrong rivals, or with one rival only, so the industry's curve is a guess.
- Ignoring noncustomers. The reasons people don't buy at all often show what to reduce or eliminate.
- Writing a tagline that overpromises. The tagline must be true of the offering on the day it ships.
- Treating the canvas as the end. It is a hypothesis about buyers; the riskiest moves need a cheap test before the relaunch.