"I have used the 3-Circle Model extensively at both Rust-Oleum and Bosch. ... There is no simpler way to cut right to the core issues of how your products are positioned to the customer and how well you are differentiated from your competitors."
Terry Horan President, Rotary Tools Robert Bosch Corporation
Quick Intro
(1) At the core of 3-Circle analysis is...
... the customer.In defining the “outside view,” we explore the value sought by customers; attributes/benefits desired, but also deeper needs and values - a segment-focused analysis.
(2) We then add a circle...
... representing the customer’s perception of our company or offering.
(3) Next, we put the 2 circles together ...
...the overlap represents equity or positive value. But
we also miss the boat with some value we create (disequity or potential
equity), and may fail to recognize that there are often unmet customer
needs.
(4) When we add a circle representing the competitor's value (as perceived by customers) ...
(5) ... we find three central areas (A, B, and C) that capture core competitive strategy concepts ...
... Area B represents "points of parity" (POPs) or stakes of the game. Areas A and C represent "points of difference" (PODs) or unique competitive advantage for us and our competitor, respectively.
(6) The other four areas ....
... capture either value that is being offered in the market that the customer doesn't currently care about (Areas D, E, and F) and the "white space" -- Area G -- which holds growth opportunities in unmet customer needs.
(7) Then we turn to the INSIDE VIEW ...
... which is an analysis of capabilities -- yours and your competitor's.
The bottom line ....
... how big is your Area A ?
... is it based on real capabilities and resources that are distinctive from competitors'?
These are the questions at the heart of 3-Circle analysis.
