FOUR ACTIONS FRAMEWORK

The Four Actions Framework developed by Chan Kim and Renée Mauborgne is used to reconstruct buyer value elements in crafting a new value curve or strategic profile. To break the trade-off between differentiation and low cost in creating a new value curve, the framework poses four key questions, shown in the diagram, to challenge an industry’s strategic logic.

The Four Actions Framework poses four key questions to translate insights into well-constructed strategies:

Which factors that the industry takes for granted should be eliminated?
Which factors should be reduced well below the industry’s standard?
Which factors should be raised well above the industry’s standard?
Which factors that the industry has never offered should be created?

The Four Actions Framework questions explained

1. Eliminate

“The first question forces managers to consider whether the factors that companies compete on actually deliver value to consumers. Often those factors are taken for granted, even though they have no value or even detract from value. Sometimes what buyers value changes fundamentally, but companies that are focused on benchmarking one another do not act on — or even perceive — the change.”

2. Reduce

“The second question forces managers to determine whether products and services have been overdesigned in the race to match and beat the competition.”

3. Raise

“The third question pushes managers to uncover and eliminate the compromises their industry forces customers to make.”

4. Create

“The fourth question helps managers break out of the industry’s established boundaries to discover entirely new sources of value for consumers.”

“Asking the full set of questions — rather than singling out one or two — is necessary for profitable growth.”

W. Chan Kim and Renée Mauborgne, “Value Innovation: The Strategic Logic of High Growth,” Harvard Business Review.

These questions help you to challenge an industry’s strategic logic and business model to arrive at blue ocean moves that break the trade-off between differentiation and low cost.

Four Actions Framework and the ERRC Grid

To ensure that you pursue differentiation and low cost simultaneously, Chan Kim and Renée Mauborgne created the eliminate-reduce-raise-create (ERRC) grid, which complements the four actions framework.

When you apply the four actions framework to the strategy canvas of your industry, you get a revealing new look at old perceived truths.

ERRC Grid Template and Examples

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