Do YOU Want to make a MASSIVE Difference to your company strategy? Create a Strategy Canvas so you can define what your industry competes on.
Having a strategy canvas allows you to map out what your competitors compete on and what you compete with them on. Then this visual tool enables you to move costs and value in order to help you create new demand.
This is exactly what Spotify did when they went out to create the number one music streaming platform in the marketplace today.
Here below we can see the strategy canvas for Spotify (The streaming music platform) and how they so significantly differentiated themselves from radio by focusing on what the customer truly valued, they were able to take significant radio market share, as well as a significant market share from traditional music purchase platforms like iTunes by differentiating themselves using the four doors framework (I’ll Cover that in a later blog).
Spotify took traditional radio and media sales by storm when they introduced their unlimited play subscription platform that also allowed people to listen to songs they had downloaded while offline!
Eliminate, Reduce, Increase, Create. The Path to Success.
By eliminating DJ’s, competitions and only playing advertising for non-paying customers, Spotify was able to significantly cut costs that traditional radio stations are bound by.
Alongside this, the subscription options allowed Spotify to offer value no radio ever could with custom music playlists, almost any artist and huge amounts of flexibility in how you use their platform.
This has allowed Spotify to sail into uncontested market space and capture huge swathes of revenue (A veritable Blue Ocean). What remains to be seen now is how they adapt to the new competitors that are coming on board as traditional radio slowly dies out, and the likes of iTunes lose out on the revenue they once commanded.
Apple is coming, but as in all true blue oceans, the incumbent competitor will be slow.
Apple though slow to the table will eventually bring out a competing product so it will remain to be seen what Spotify do in their Value Innovation strategy in the future and whether they can grow their already huge market share.
As you can see from the strategy canvas, Spotify was successful in massively differentiating themselves from the competition by focusing on what the customer truly valued and as a result reduced the cost to the end consumer significantly.
Map out your business strategy Canvas against your competitors to start to draw the picture in your mind just how similar or dissimilar your offering is to your customers. Then you will begin to understand why discounting is going to kill your profits where you could be “value innovating” for your customers and in doing so opening up uncontested market space.
The Finish. DFTBA.