Stop fighting for share in a bloody “red ocean.” The ERRC grid — Eliminate, Reduce, Raise, Create — systematically reshapes what you compete on to open uncontested space.
▸ Try the interactive toolKim and Mauborgne's Blue Ocean Strategy challenges companies to stop competing in overcrowded “red oceans” and instead create uncontested market space — “blue oceans” — where they can grow without fighting for share. The ERRC grid (Eliminate, Reduce, Raise, Create) is the practical tool for defining a blue-ocean move.
ERRC asks four questions that systematically reshape how your product competes: which factors the industry takes for granted should be eliminated, which reduced well below the standard, which raised well above it, and which entirely new factors should be created. The aim is to break the usual trade-off between differentiation and low cost by changing the competitive factors themselves rather than competing harder on the existing ones.
Eliminate — which taken-for-granted factors can go entirely?
Reduce — which can drop well below the industry standard?
Raise — which should rise well above it?
Create — which new factors can you introduce that the industry has never offered?
Competing head-to-head on the industry's standard factors is a race that erodes everyone's margins. Blue Ocean asks whether you can change the factors instead.
| The shortcut | What it costs | What it gives you instead |
|---|---|---|
| Competing on the same factors | Everyone improves the same things; margins erode for all. | ERRC changes what you compete on, not just how hard. |
| Feature parity arms race | Matching rivals feature-for-feature is endless and unwinnable. | Eliminate/Reduce frees resources from factors that don't differentiate. |
| Assuming all factors are sacred | Teams improve factors customers don't actually value. | Eliminate forces the question: does anyone really need this? |
| Differentiation OR low cost | Treating them as a trade-off limits the options. | ERRC pursues both at once by reshaping the factor set. |
List what every player in the category competes on — the factors customers are trained to expect. This is the red ocean you're trying to escape.
Which of those factors does the industry compete on out of habit, but customers don't truly value? Removing them cuts cost and breaks the herd.
Which factors are over-served — delivered well beyond what customers need? Dial them below the standard to free resources.
Which factors are under-served across the industry? Push these well above the norm — this is where you create new value.
What could you offer that the industry never has? New factors are where blue oceans actually open — they give customers a reason that no competitor can match.
A team was losing a feature arms race in a crowded category, matching rivals point for point and watching margins thin. Running ERRC, they questioned which industry-standard factors customers actually valued — and found several that everyone offered but few used.
They eliminated two of those factors entirely, reduced another that was wildly over-served, redirected the freed resources to raise one badly under-served factor, and created one capability no competitor offered. The result was a product that looked different on every axis that mattered — cheaper to run and more differentiated, escaping the head-to-head fight.
The deliverable is the four-quadrant ERRC grid, often paired with a “value curve” showing how your factor profile diverges from the industry's.
| Action | Question | Effect |
|---|---|---|
| Eliminate | Which factors can go entirely? | Cuts cost, breaks from the herd |
| Reduce | Which are over-served? | Frees resources |
| Raise | Which are under-served? | Creates differentiated value |
| Create | What's never been offered? | Opens uncontested space |
The biggest strategic gains usually aren't from competing better on the existing factors — they're from changing which factors matter. ERRC's Eliminate and Create moves are where uncontested space actually opens.
The discipline that makes Blue Ocean work is questioning the sacred. Every industry has factors that all players offer because “that's how it's done,” and customers tolerate rather than value them. Eliminating or reducing those frees the resources to raise an under-served factor or create a new one — which is how you escape the differentiation-versus-cost trade-off. Competitors locked in the parity race never make these moves, which is precisely why the space they open stays uncontested.
Adding without Eliminating or Reducing just inflates cost. The freed resources from Eliminate/Reduce fund the rest.
If you assume every industry-standard factor is necessary, you can't escape the red ocean. Question them.
“New” isn't automatically valuable. The created factor must matter to customers.
Doing the same things slightly better is still a red ocean. Blue ocean reshapes the factor set.
A blue-ocean move needs sharp positioning (Tool 15) to make the new factor set legible to buyers.
The matrix and competitor types (Tools 08, 09) reveal the industry factors ERRC then reshapes.
A blue-ocean move is a strong guiding policy — it makes a real choice about where not to compete.
ERRC's Raise and Create map onto specific differentiation levers (Tool 17).
Pick a crowded category you know. List the factors everyone competes on. Then force one entry in each ERRC quadrant — especially something to Eliminate and something to Create.
Check the balance: does your Eliminate/Reduce free enough to fund your Raise/Create? Blue ocean moves should lower cost and raise value.
The factor you'd eliminate — the one everyone offers but few customers value — is usually the hardest to let go of and the most freeing once you do.