The ERRC Grid is the core strategic planning tool from Blue Ocean Strategy. ERRC stands for Eliminate, Reduce, Raise, Create. For each factor your industry competes on, you pick one of those four actions — and together they define a new strategic profile.
The goal is to break what Blue Ocean Strategy calls the value-cost trade-off. Most businesses assume you can either offer more value or cut costs — not both. The ERRC Grid shows you a way out of that trap. By eliminating and reducing factors customers don’t actually care about, you free up resources to invest in things that do matter — or things nobody’s offering yet.
Used alongside the Four Actions Framework, the ERRC Grid takes a strategic conversation from theory to an actual action plan. Each cell becomes a concrete decision with resource implications.
The 4 Elements of the ERRC Grid
Eliminate — What Do You Remove Entirely?
This quadrant asks which factors your industry treats as standard that customers don’t actually value. These are things competitors offer because “everyone does it” — not because buyers ask for it or because it wins deals.
Eliminating factors is the hardest call to make. It feels like giving ground. But the research behind Blue Ocean Strategy shows most industries carry significant cost in things customers barely notice. Cutting them is what funds the Create quadrant.
Ask yourself: What do we spend on that customers rarely mention? What does every competitor offer that doesn’t actually win customers?
Reduce — What Do You Dial Back Below Industry Standard?
Reduce is for factors worth keeping — but at a lower level than the industry currently delivers. These are areas where the market has over-served customers. You’ve invested in features and specifications beyond what buyers actually want or use.
This one’s easier to stomach than Eliminate. You’re not cutting it — you’re right-sizing it.
Ask yourself: Where have we over-engineered beyond what customers value? What are we competing on that customers treat as “good enough”?
Raise — What Do You Push Above Industry Standard?
Raise targets the places where your industry chronically under-delivers. These are the pain points — things customers consistently struggle with, complain about, or switch providers over. Fix them better than anyone else.
This is the quadrant that costs money. That’s exactly why it requires the savings from Eliminate and Reduce. Raise without those two is just cost inflation.
Ask yourself: Where do customers hit real friction or disappointment? What problem, if you solved it completely, would make buyers switch to you?
Create — What Do You Invent From Scratch?
Create is the hardest and the most powerful. It asks what entirely new value you can introduce that nobody in your industry has ever offered. This is where real blue ocean differentiation comes from — not doing existing things better, but offering something your competitors aren’t even competing on.
Create actions open up new demand. They attract people who currently don’t buy from anyone in your industry because nothing available meets their actual needs.
Ask yourself: What do non-customers need that nobody currently offers? What value from a completely different industry could you bring into yours?
ERRC Grid Template
Use this to map your own strategic profile. One row is enough to start — fill in the factors that matter most to your industry first:
| − ELIMINATE | ↓ REDUCE | ↑ RAISE | + CREATE |
|---|---|---|---|
| Which factors the industry takes for granted should be cut entirely? | Which factors should drop well below the industry standard? | Which factors should go well above the industry standard? | Which factors should be invented — things the industry has never offered? |
ERRC Grid Example: Cirque du Soleil
This is the canonical Blue Ocean Strategy example for a reason — it’s clean and the results were dramatic. Cirque du Soleil took a declining traditional circus industry and built an entirely new category: theatrical acrobatic entertainment. They attracted adult theatergoers who’d never considered a circus ticket, and charged premium prices for it.
Here’s how their ERRC Grid looked:
| − ELIMINATE | ↓ REDUCE | ↑ RAISE | + CREATE |
|---|---|---|---|
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Expensive star performers and animal acts got cut. That freed up budget to invest in theatrical production quality, original live music, and a coherent narrative — the exact things that made theater audiences willing to pay more than a standard circus ticket. The company went from a struggling street troupe to a global brand generating hundreds of millions annually. The ERRC Grid is where that shift was planned.
How to Build Your Own ERRC Grid
- List every factor your industry competes on — price, speed, features, service quality, convenience, brand, status, etc. Don’t filter yet, just list everything.
- Score your current position — how do you and your competitors deliver each factor? A simple strategy canvas (low/medium/high) works fine.
- Talk to non-customers — the best Create ideas come from people who don’t buy from anyone in your industry. Find out why, and what would change that.
- Assign every factor to a quadrant — Eliminate, Reduce, Raise, or Create. Nothing belongs in two quadrants.
- Check the math — savings from Eliminate and Reduce should fund the investments in Raise and Create. If it doesn’t balance, you’re adding cost without a trade-off.
- Test before you commit — validate that your Raise and Create actions actually matter to the buyers you’re targeting before you allocate significant resources.
ERRC Grid vs. Other Strategy Tools
People ask about this a lot, so here’s the quick version:
- vs. SWOT Analysis: SWOT diagnoses where you are. The ERRC Grid decides where you’re going and what you’re doing differently to get there. SWOT is inputs; ERRC Grid is the plan.
- vs. Porter’s Five Forces: Porter analyzes industry structure — the competitive forces already in play. The ERRC Grid is about how to escape those forces by changing what you compete on in the first place.
- vs. Competitive Strength Grid: A competitive strength grid compares your performance to competitors on existing factors. The ERRC Grid adds the “Create” dimension — inventing factors that don’t exist in the current competitive set at all.
Frequently Asked Questions About the ERRC Grid
What does ERRC stand for?
ERRC stands for Eliminate, Reduce, Raise, Create. These are the four actions from the Four Actions Framework developed by W. Chan Kim and Renée Mauborgne at INSEAD as part of Blue Ocean Strategy.
What is the primary goal of the ERRC Grid?
To break the value-cost trade-off. The assumption that more value always means higher costs is what keeps most companies stuck competing in the same way as everyone else. The ERRC Grid shows you how to cut costs and improve value at the same time by rethinking which factors actually matter.
How is the ERRC Grid used in Blue Ocean Strategy?
It’s the action step that follows the strategy canvas and the Four Actions Framework. Once you know which factors to act on, the ERRC Grid maps those decisions onto a single visual page and connects them to resource allocation. It’s what turns strategic analysis into something you can actually execute.
What’s the difference between the ERRC Grid and the Four Actions Framework?
The Four Actions Framework asks the four ERRC questions. The ERRC Grid is the visual tool that captures the answers — a simple table that makes the strategic decisions visible and easy to communicate across the organization.
Can small businesses use the ERRC Grid?
Yes — and it often works better for small businesses than large ones. Smaller companies have less legacy to defend and more freedom to actually eliminate things. The discipline of choosing what to stop doing is especially valuable when resources are tight.
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