Is your strategy truly unique, or is it merely an echo of your competitors'?

Choices leave traces, and your business model is a map of your strategic choices.

By mapping your business model and that of your competitors, you identify customer segments, preferred competitive criteria, and how value is created and delivered.

However, if you serve the same customers, meet the same needs, and sell at the same relative price as your competitors, then, according to Michael Porter's definition, you do not have a strategy.

Differentiation is essential.

It is therefore imperative to question your business model and the choices of your strategy, and to evaluate where value originates and how it is realized.

This same level of introspection is crucial for deciphering the competition.

By identifying the drivers of value creation, it is possible to observe weak signals, stimulate innovation, and increase the robustness of our competitive advantage.

Here's how to challenge your business model and explore new opportunities to increase the robustness of your competitive advantage.

1. Document Your Strategy And Your Competitors’

Map all components of your business model. What choices have been made regarding:

• Customer segments?
• Needs (jobs), pains, and desired gains?
• Relative prices?
• Key activities and resources (your value chain)?
• The economic model?

Several analytical frameworks are available to you.

Whether you opt for Roger Martin's Strategy Cascade choices (Where to Play / How to Win) or the visual approaches of the Business Model Canvas and the 10 types of innovation, these tools facilitate documentation. The essential thing is to map all strategic choices and evaluate the similarities and differences with the competition.

To do this, we suggest the following steps:

1. Map your business model.
2. Map the models of your main competitors.
3. Ensure you compare similar market segments.
4. Identify the key elements of the value chain and the economic model.
5. Also, compare the financial elements:
   • Warren Buffett mentions the importance of ROIC as a measure of competitive advantage. Identify this measure if possible.
   • A high gross margin can also indicate that the company sells its products or services at a premium price due to a competitive advantage through differentiation.

In light of this documentation, ask yourself:

• What are the key observations, and what are the fundamental differences?
• How are our competitors' strategic choices evolving?
• Do we observe weak signals that could announce disruptions or significant changes?

All these observations are rich in learning and will offer you opportunities for innovation (not to copy, but to create or strengthen sustainable differentiation).

2. Map The Value Created

Identifying business models reveals a snapshot of the strategy. But what about the value created and perceived by customers?

This is where the Value Map draws its strength. How can you compare the value drivers desired by the customer segment with your company's offerings and those of your main competitors? This is the question that Blue Ocean Strategy proposes, among others.

To create this map, you will need to observe:

1. The value elements desired by the customer segment.
2. The value elements offered by your company.
3. The value elements offered by your competitors.
4. Untapped value opportunities.

These elements partly stem from the observations made in the first step. However, mapping value requires an intimate understanding of your customers' jobs, pains, and gains.

Often, when we work with our clients, this is the first step of intervention.

Ensuring that your understanding of these needs is grounded in firsthand observations, rather than solely in our interpretation, is fundamental.

3. Identify The Drivers Of Transformation

Upon reviewing business models and mapping value, you can establish the extent to which offerings, prices, and activities are similar or different for a given segment.

This evaluation opens the door to multiple possibilities: How can you rethink value through different strategic choices?

Now is the time to explore!

Roger Martin proposes the following question: How might we?

Be creative and develop at least three strategic options. Don't limit yourself to a binary exploration where option 2 is the exact opposite of option 1. Push the thinking further.

Identify the success conditions for these options, and more particularly, the barriers. The elements for which you have the least certainty. Then, develop tests to increase your confidence level and mitigate your risks.

Think about ways to create your differentiation holistically.

As Larry Keely suggests, consider combining the elements of your business model differently to maximize the impact of your value creation and differentiation. Create a model that is more difficult to copy!

Three Important Questions

This review allows you to evaluate your strategic choices by paying attention to customers (value) and competitors (differentiation).

By doing it frequently, it also allows you to detect the first signs of changes among customers, competitors, and even non-consumers.

Pay particular attention to these three questions:

• Who is responsible for these activities in your organization?
• How often do you conduct this review?
• How are the observations discussed within your executive committee?

Have a good week and a good review of your business model!

Have a good week,

Eric L'Heureux

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