When conducting a brand audit, the simplest models often work the best – BCG’s Growth-Share matrix, a SWOT analysis, an organizational chart. These models work because they distill tons of information, identify what’s important and are easy to grasp.


Our favorite model for identifying brand strengths and weaknesses – the 3-Circle Model – is stunningly simple, too. It involves just three overlapping circles representing the brand, customers and competitors. Mapping the intersections of customer desires, brand capabilities and competitive strengths allows strategists to classify and prioritize different types of ‘value’. 

Why it Works
 

The 3-Circle analysis is powerful in three ways:


1. Broader look at potential differentiators
A typical brand analysis appropriately focuses most attention on points of difference as potential sources of competitive advantage. In addition to identifying points of difference, a 3-Circle Analysis highlights potentially leverageable points of parity as well as unaddressed customer needs. If these are important to customers and if no one else is talking about them, or if your brand can talk about or deliver them uniquely, they may be more relevant and potentially more differentiating than so-called ‘points of difference.’ Countless brands have achieved success by focusing on category benefits (Raid Kills Bugs Dead, Lysol Kills 99.9% of germs, Foster Farms chickens California-grown) or creating a point of difference that lies outside of the product (Keebler Cookies are the only ones made by elves in a hollow tree, a gecko assures Geico customers they will save money). 
 

2. Keeps customer needs in focus


The 3-Circle Model also provides a “final resting place” (pun intended) for a brand’s areas of ‘non-value’ –features that may be differentiating or important to keeping up with competitors but that are simply unimportant to customers. The average supermarket now carries over 38,000 items, many of which are minor flavor or size variations. In the technology category, the features arms race continues unabated. According to Harvard professor, Youngme Moon, “There comes a point beyond which we are hard to impress…beyond which additional improvement ceases to add value.” At that point, it’s time to take a closer look at what customers truly value.


3. Forces clear thinking about competitive differences


Finally, the 3-Circle Model ensures a close look at potential points of vulnerability. The competitive landscape is dynamic, meaning today’s advantage can be leapfrogged at any moment. Competitive intelligence is not the same as competitive insight. Brands need to keep a keen eye on competitors’ points of difference as well as their own, lest they find themselves in the position of Kodak or Blockbuster, outflanked by companies with a better sense of what customers truly want.

Putting the Model to the Test

Marketing Professor Joe Urbany and former Professor James H. Davis, both of University of Notre Dame Mendoza School of Business, developed the 3-Circle Model. It has been the foundation of the Mendoza MBA marketing curriculum for over 10 years. The resulting map looks simple, but it incorporates hours of digging, discussion and debate.

To learn more about the 3-Circle Analysis and how it can be applied to brands, check out these resources:

The Brand Audit Category of Branding Strategy Insider.

How to Conduct a Brand Audit – First in a series of ‘How-To’ Whitepapers by Brand Amplitude, it describes step by step where to find the information needed to populate the 3-Circle map.
 

Grow by Focusing on What Matters: Strategy in 3-Circles by Joel E. Urbany and James H. Davis

Contributed to Branding Strategy Insider by: Carol Phillips and Judy Hopelain of Brand Amplitude 

Sponsored By: The Brand Positioning Workshop

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