What is the purpose of the three circles analysis?

The three circles analysis serves as a strategic tool designed to articulate a company’s competitive advantage by visually representing the key elements that contribute to its unique position in the market. This analysis often involves mapping out three overlapping circles that represent the company, its competitors, and the customers. The intersections of these circles help to highlight the areas where the company provides value that competitors may not offer, thus clarifying what sets the company apart in the eyes of consumers.

By focusing on how these three elements interact, businesses can more effectively communicate their strengths and how they meet the needs of their target audience, leading to an enhanced understanding of their competitive advantage. This clarity is essential for formulating strategies that leverage unique selling propositions and guide decision-making to strengthen market positioning.