Lean Canvas Model Section 9- Competitive Advantage
The final section of the Lean Canvas Model is the Competitive Advantage.
This section has to do with how you will be competitive with companies that do the same thing that you do, or at least a similar thing.
Once again this ties into other sections. A business plan has many moving parts, but they all work together. When analyzing your competitive advantage, it is very important to look at locations that are doing what you are planning to. Especially if they are in your specific area. Often, people will open a business that directly competes with another local restaurant, or even a chain, and after the newness of their restaurant wears off, people go back to what they know. When establishing how you are able to be competitive, it’s important to look at other restaurants that do what you do and establish how you stand out from them. It is important to note that saying things such as “we have the best,” or “we are the most amazing” are not convincing. General descriptive words are not helpful. When a company says they are the best, often they are not. If you cannnot be descriptive in how you stand out, you will not get very far. It is much more useful to indicate what is different and important to you and the customer. Some examples are:
We use as many locally sourced products as possible to support local business and farms.
We offer a wide range of vegan and gluten free option for those that need it, but you would never know they are vegan and gluten free.
We use the highest quality ingredients and avoid highly processed ingredients. We use whole foods whenever possible.
We guarantee you can sit down, eat, and pay in less than an hour. You won’t be late coming back from lunch.
We are the only _______ shop in __________ miles.
The above chart can help you compare your business to other businesses so that you will know if you are needed in a particular area. You can also look at businesses doing what you are doing in other areas so that you can compare your potential success to their success. Let’s look at each of these areas.
Name- Your business name is very important. Before you decide, google your business name and make sure that no one else has the name, even in another town. If that business chooses to trademark or copywrite their name after you have established your business, you could be forced to change your name, which means changing your website, social media, and all printed materials. This can be very costly and can confuse customers. You may also want to purchase the URL name for that business so that you have the option to create your own website if you don’t have one to start. This costs about $20 per year on SquareSpace and is work the money. (Your website costs more on top of this.) Names should be creative and give a clue as to what you offer.
Customer segments- for this, look at what restaurants, regardless of what type of food offered, have the same target market. For example, McDonalds and Wendy’s have similar products and similar target markets. How have they managed to stand out from each other and attract customers instead of the other. Sometimes this looks like, “I’m in the mood for a bacon cheeseburger, Wendy’s has better ones.” or “I really want salty French fries. McDonalds are the best.” What will your customers “be in the mood for”?
Service/Product-What are your menu items? (Food is a product) What does your style of service look like? (Sit down, drive through, fast food, delivery) The way you serve your food is a service. How will you distinguish yourself in these areas.
Costs-How do your costs compare with other businesses? A good way to look at this is average entrée cost. For example:
McDonalds- $5
Hwy 55-$8
Chilis-$10-15
Ruth’s Chris-$20-$40
Unique Value Proposition- Go back to LCM 3 for yours and for the businesses you are comparing to, list what you think their unique value proposition is. It should be clear and if its not, they aren’t doing a great job with their business plan.
Positive/Negative Practices- Finally, you want to look at the positive and negative things with each business. If it’s in your business, fix it. If it’s in another business, improve on it or address it.
A few problems you may want to address…
Are you offering the same types of items as other businesses?
Sometimes, a community is not adventurous and not willing to try new things. They like the same things they have always had from the same places that have always been there. So, if you open a location, not only are you competing with existing businesses with a high loyalty base, you have not offered what is valuable to the consumer. You are solving a problem that didn’t exist. The area doesn’t want what you are offering.
A way to counter this problem is to either look at other locations that will appreciate what you offer, or to offer similar menu items in a different way. You can do this by:
offering a level of luxury not offered in other businesses. (A fine dining soul food restaurant.)
offering services not offered at the other locations. (Delivery, curbside pickup, or outdoor seating that allows dogs)
offer theming that may appeal to customers. (converting an old barn for a rustic location, decorate in a specific way that honors something locals enjoy.)
Make changes to classics that are not too hard to handle. (Changing up cheese in mac and cheese, offering lots of different toppings for burgers, making side dishes that stand out (be careful with this one, because if you change up
Are restaurants around you inconsistent with menu and service?
Another issue that may be a problem is that many local restaurants don’t standardize recipes and formulas. Customers want consistency as well as “something different".” They also don’t train employees well to make menu items or serve customers in a friendly and efficient manner. Some ways to address this are:
Be sure to have written recipes that are easy to follow and train all kitchen staff on plating and portion sizes. Customers get very frustrated when you go to eat and each time you order the same thing and get a vastly different product.
Make sure you train servers well in the way you would like your customers to be treated and supervise carefully to ensure that is happening.
Are you struggling with how you will stand out in a particular area?
If you are passionate about your location, change your menu.
If you are passionate about your menu, change your location.
If you don’t want to change either, enhance your menu items, service level, price point, or figure out how to make your particular location a destination with decoration or luxury level.
It is very important to figure out your competitive advantage clearly before you open so that you are not starting out your business in a deficit.
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