The next step involves six paths for constructing the market, and four ways of defining new offerings. (Venture capital investors often assess the worth of a startup by the Total Addressable Market or TAM metric.) 5. The authors also identify three types of “non-customers” – those who may jump ship if a better offering comes, those who have evaluated your offering but chose not to buy it, and those who are unaddressed and unexplored by the whole industry but could benefit from your offering.įor example, Square identified the payment services market for P2P transactions and SMBs, outside of the credit card space. (See my framework of The ‘8 Is’ of Design Thinking, and book reviews of 101 Design Methods and Creative Confidence.) This discussion will help better understand customer experiences and open up new opportunities through “what if” questioning, and not just identify new product features. There are similarities between this approach and design thinking. For each of these levers, companies should ask what is the biggest block to this lever, and what the reasons are for these blocks. Similarly, the authors define six utility levers, but I would expand them into customer productivity, simplicity, convenience, risk reduction, image, affordability, lack of adverse side effects, and environmental friendliness. The buyer activity cycle, as defined by the authors, covers six steps, but I would expand those into a wider range: discovery, comparison shopping, purchase, delivery, returns/damage, installation, use, supplements, ongoing costs, maintenance, complaints, repair, disposal, and even social media commentary. The Buyer Utility Map is a table where the steps in the buyer experience cycle (columns) are mapped onto utility levers (rows). The authors provide two tools that are particularly useful for startups: the Buyer Utility Map and Non-Customers Map.

In red ocean scenarios, the profiles of all competitors look similar and may eventually converge.

The Y-axis is a three-level or five-level ranking of the above elements similar ratings should be plotted next to each other. The X-axis can include up to a dozen elements such as offerings, operational activities, costs, marketing, customer relations, and brand image.

The Strategy Canvas Tool helps map the competitive factors and offering levels in your industry this should give you a map of the cost structures of your company and its competitors.

Blue Ocean Strategy free instal