CEOs at small and startup technology companies focus their energy on developing their solution and expanding their market share. They also need to consider how to create and maintain a competitive advantage. The Business Model Canvas provides a framework to think of ways to build an advantage.
The Business Model Canvas is a strategic tool to help corporations identify and analyze the elements that drive business growth. It provides CEOs with a big-picture view of the business and helps to identify the areas where investment can lead to a competitive advantage.
We will look at six ways to leverage the Business Model Canvas to improve your corporate competitive positioning.
Key Activities
Key Activities are the critical tasks used to create and deliver customer value. It represents the areas the corporation will heavily invest in to be better than its competitors. There are many possibilities for CEOs to consider. Some examples include
- Create processes to improve the information flow between customers and suppliers through your corporate value chain.
- Invest in automation to perform critical tasks more cost-effectively than competition.
- Run experiments to understand market conditions and customer reactions quicker, more efficiently, and less costly than competition. Turn the results into new capabilities, products and markets.
Key Resources
The corporation uses Key Resources to create and deliver value to the customer. It can include physical, intellectual and human resources.
CEOs can invest in capabilities to continually improve their resources so competitors remain disadvantaged. For example, corporations often list data as a critical resource. Corporations can invest in technologies to collect the correct data and improve data usage to increase customer value. That is, they improve the data to information to action cycle.
Customer Segmentation
The Business Model Canvas identifies the different customer groups the corporation is targeting. Customer segmentation helps corporations understand customer needs and preferences to define the value created.
CEOs can also use Customer Segmentation to select the corporation’s competition wisely. CEOs can then operate in a market where they can create a differentiated position and generate high returns in the face of competition.
Customer Channels
CEOs use customer channels to reach customers. Channels can be physical or digital. CEOs create competitive advantage by seeking new ways to reach customers or by more effectively using the channels shared with competitors.
Customer Relationships
The Customer Relationships entity describes the interactions the corporation will have with customers. Generically speaking, these are direct sales, self-service and personal assistance. CEOs can explore additional relationships that differ from the competition. For example, they may have a dynamic relationship where the corporations start with a high-touch engagement and later shift to an automated interaction. Balancing costs with how customer interactions occur is a good source of advantage.
Value Proposition
The Business Model Canvas describes the key benefits that customers can expect from the corporation’s solutions. CEOs create competitive advantage by serving customers in new and engaging ways.
Summary
A single competitive position will rarely hold for many years. Eventually, competitors will mimic the successful components, searching to replicate your success. CEOs must continually refine their competitive advantage and seek new opportunities to create customer value. Notice how this activity is itself a key process and, itself, is a source of competitive advantage.