4 Actions Framework

A multitude of industry sectors find themselves ensnared in relentless competition as organizations strive vigorously, frequently contending over identical attributes, all the while presenting comparable goods or services.

This fiercely competitive environment has clear and accepted boundaries with well-defined competitive rules. Companies strive to surpass their competitors and capture a larger portion of the product or service demand in this environment.

Opportunities for profits and growth diminish as the market space becomes increasingly congested.

Products either transform into commodities or find their niche, leading to fierce competition that turns the industry into a battleground. That is why such an environment is called “red oceans.”

A way for profitable and sustained growth is to distinguish the organization from the intense rivalry by establishing an unchallenged market arena—i.e., a “blue ocean.” Blue Ocean is a strategy that advocates fashioning novel markets and Value Propositions that render the competition inconsequential.

Value Innovation lies at the core of this strategy, for which uncontested markets are shaped. Value Innovation involves the concurrent pursuit of distinctiveness and cost efficiency. Companies provide significantly higher value to end customers at a lower cost, breaking the traditional cost-value trade-off.

The bedrock of the Blue Ocean Strategy is the 4 Actions Framework, which represents a potent instrument. The core assertion of the 4 Actions Framework is that creating a fresh market can yield greater benefits compared to competing against entrenched rivals in an established market.

The 4 actions that the framework takes into consideration when either improving an existing offering or creating a new one include:

Raise
Eliminate
Reduce
Create

Key to executing an efficacious 4 Actions Framework strategy is pinpointing the recurring challenges that the organization can uniquely alleviate. It is capable of evaluating the existing Value Proposition of a company while uncovering methods to formulate a fresh one that aligns with an alternative group of customers or requirements.

Let us go into a little more detail about some of the actions.

Raise

Questions regarding features that must be raised well above industry standards related to product, pricing, or service are answered in this action. The key question to be asked is, “Which factors warrant raising significantly beyond the industry’s typical standards?”

This question compels businesses to unveil and eradicate the trade-offs that buyers are compelled to accept.

Eliminate

Areas of a company or industry that can be entirely abolished to decrease costs and help create a completely new market are explored in this action. The key question to ask here is, “What are the factors commonly overlooked by the industry that should be eliminated?”

The said query compels the business to contemplate the removal of elements that companies within the industry have traditionally competed upon. The emphasis should lie on attributes demanding substantial effort and investment but yielding minor revenue or new customers.

Reduce

This action looks at spheres of a business’s product or service that are not wholly essential but are noteworthy in the industry and can be condensed without entirely eliminating them.

Interested in learning more about the 4 Actions Framework? You can download an editable PowerPoint presentation on the 4 Actions Framework here on the Flevy documents marketplace.

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