Eliminate-reduce-raise-create grid

Definition

The eliminate-reduce-raise-create grid is a strategic tool used to identify ways to create value innovation by systematically analyzing the factors that influence a product or service. This framework helps organizations rethink their offerings by determining what factors can be eliminated or reduced, what can be raised, and what new factors can be created to deliver unique value to customers. It connects closely with the concepts of value innovation and blue ocean strategy, as it encourages companies to seek new market spaces by breaking away from competition-driven approaches.

5 Must Know Facts For Your Next Test

1. The grid helps businesses shift their focus from competing in saturated markets to discovering untapped markets, enabling them to innovate and provide unique offerings.
2. By applying the grid, companies can uncover cost-saving opportunities while enhancing customer value, effectively driving profitability.
3. It encourages teams to think creatively about their products or services by challenging existing assumptions about what is necessary for success.
4. The eliminate-reduce-raise-create grid is often represented visually, making it easier for teams to collaboratively brainstorm and prioritize initiatives.
5. This framework aligns with the larger goal of blue ocean strategy, which is about creating new demand in an uncontested market space.

Review Questions

• How does the eliminate-reduce-raise-create grid facilitate value innovation for companies seeking to differentiate themselves in the market?
  • The eliminate-reduce-raise-create grid facilitates value innovation by encouraging companies to systematically evaluate their offerings against key factors in the industry. By identifying elements that can be eliminated or reduced, businesses can cut unnecessary costs while focusing on raising factors that enhance customer value. This process opens up opportunities for creating new attributes that attract customers and set them apart from competitors, ultimately fostering a unique position in the market.
• Discuss how the use of the eliminate-reduce-raise-create grid aligns with the principles of blue ocean strategy in identifying new market opportunities.
  • The use of the eliminate-reduce-raise-create grid aligns with blue ocean strategy by helping organizations focus on value creation rather than competition. By leveraging this framework, companies can pinpoint areas where they can diverge from industry norms, enabling them to craft unique offerings that fulfill unmet customer needs. This process leads to discovering blue oceans, where they can operate without direct competitors and maximize their potential for growth.
• Evaluate the impact of using the eliminate-reduce-raise-create grid on a company's long-term strategic direction and market positioning.
  • Using the eliminate-reduce-raise-create grid can significantly impact a company's long-term strategic direction and market positioning by fostering a culture of continuous innovation and adaptability. By regularly applying this framework, companies can stay ahead of industry trends and respond proactively to changing customer preferences. This ongoing process allows businesses to redefine their market boundaries and create sustainable competitive advantages that position them favorably against competitors over time.

Related terms

Value Innovation: A strategy that focuses on making the competition irrelevant by creating new value for both the company and its customers.

Blue Ocean Strategy: A business approach that seeks to create new market spaces ('blue oceans') rather than competing in existing ones ('red oceans').

Strategic Canvas: A visual tool used in conjunction with the eliminate-reduce-raise-create grid to illustrate the current state of play in the market and help identify opportunities for value innovation.