How to fill in the Blue Ocean Strategy (ERRC)
Stop competing on the industry's terms — eliminate, reduce, raise, and create. This guide walks every block in the recommended order — what belongs there, the questions that unlock it, and patterns from real canvases.
Blue Ocean Strategy argues that competing head-on in an existing market — a 'red ocean' — traps everyone in feature parity and price wars. The alternative is to create uncontested space by changing which factors you compete on at all.
The ERRC grid is the tool that makes this concrete. Four questions: which factors the industry takes for granted should be eliminated, which should be reduced well below the standard, which should be raised well above it, and which should be created that the industry has never offered. Eliminate and reduce cut your cost base; raise and create build differentiation. Doing all four at once is what makes low cost and differentiation compatible rather than opposed.
Developed by W. Chan Kim and Renée Mauborgne at INSEAD, published in Blue Ocean Strategy (2005). The ERRC grid is the framework's central analytical tool.
Eliminate
Which factors should be removed entirely?
Factors the industry has long competed on that could be removed altogether. These usually survive because everyone assumes they are required, not because customers value them. This is the hardest and most valuable block: every elimination frees cost that funds the raise and create columns. If nothing here feels slightly reckless, you have not pushed hard enough.
Ask yourself
- What do we offer only because competitors do?
- Which feature would most customers never miss?
- What costs us a lot and is rarely used?
- What is here purely out of industry habit?
Patterns that work
- Removing an assumed-essential factor is where the cost saving comes from
- Test each candidate: would customers actually notice its absence?
- Industry convention is not the same as customer requirement
Reduce
What should drop well below the industry standard?
Factors worth keeping but deliberately delivered below the industry norm. Over-delivery is usually the result of competitors matching each other rather than anyone asking customers what they need. Look for places where you are serving the most demanding 5% of buyers at a cost imposed on everyone.
Ask yourself
- Where do we over-serve most customers?
- Which factor has been escalating because competitors match each other?
- What could be 'good enough' rather than best in class?
- What are we paying for that only power users notice?
Patterns that work
- Over-service is a cost that customers did not ask for
- Reducing is safer than eliminating and often frees nearly as much cost
- Serving the top 5% at everyone's expense is the pattern to look for
Raise
What should go well above the industry standard?
Factors where you deliberately overshoot the norm because customers genuinely care and everyone currently under-delivers. Look for the compromises the industry forces on customers and treat them as opportunities. The money to fund this comes from the eliminate and reduce columns — that is the trade the grid is designed to make visible.
Ask yourself
- What do customers complain about across the whole industry?
- Which compromise does everyone force customers to accept?
- Where would being twice as good actually be noticed?
- What can we afford to raise using the savings above?
Patterns that work
- Target the compromises customers currently accept as unavoidable
- Raise few factors, decisively — spreading effort produces parity
- Fund this explicitly from the eliminate and reduce columns
Create
What should be offered that the industry never has?
Entirely new sources of value that the industry has never offered, often reached by looking at non-customers — the people who considered your category and chose nothing at all. Their reason for refusing is usually the specification for this block. New factors are what genuinely open uncontested space rather than merely improving your position within the existing one.
Ask yourself
- Why do non-customers refuse this category entirely?
- What adjacent problem could we solve at the same time?
- What has nobody in this industry ever offered?
- What would make the usual comparison irrelevant?
Patterns that work
- Study non-customers: their refusal is the design brief
- New factors create the blue ocean; raised factors only win the red one
- A new pricing or access model counts as a created factor
Ready to fill yours in?
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