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MENTAL MODEL · M6612

Eliminate-Reduce-Raise-Create Grid

Eliminate-Reduce-Raise-Create Grid
BusinessmediumStrategic Management
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Updated 2026-08-09

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INTRODUCTION

English translation pending.

CORE DEFINITION

The Eliminate-Reduce-Raise-Create (ERRC) grid is the central analytic tool of Blue Ocean Strategy, developed by W. Chan Kim and Renee Mauborgne. It asks four questions about the factors an industry currently competes on. Eliminate removes factors the industry has long fought over that no longer create value. Reduce lowers others below industry standard. Raise lifts some above industry standard. Create introduces factors the industry has never offered. The grid's key condition is that all four actions are pursued together: cutting cost through elimination and reduction while lifting buyer value through raising and creation. The intended output is a new value curve that diverges from competitors'.

SCAFFOLDING EFFECT

psychology

Reduce cognitive load

- Use factor inventory: list every factor the industry currently competes on before asking what to change. - Use four-way pass: run each factor through eliminate, reduce, raise, and create. - Use cost-value check: confirm that cuts fund the additions rather than eroding margin.

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Anchor fast decisions

Competing on the same factors as rivals forces a trade-off between differentiation and low cost, because raising quality costs money. ERRC breaks that trade-off by changing which factors exist at all: eliminating and reducing removes cost that buyers do not value, and those savings pay for raising and creating factors buyers do value. The result is a value curve that diverges from the industry's, which moves the firm into uncontested space rather than a better position on the same curve.

MINIMUM ACTION

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