3Cs model
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The 3C's Model is a business model, which offers a strategic look at the factors needed for success. It was developed by business and corporate strategist Kenichi Ohmae.
The 3C’s model points out that a strategist should focus on three key factors for success. In the construction of a business strategy, three main players must be taken into account:
- The Customer
- The Competitors
- The Corporation
Only by integrating these three, a sustained competitive advantage can exist. Ohmae refers to these key factors as the three C’s or strategic triangle.
There are certain needs that arise from the customer end. They include core benefit or service and expected product. Recognizing this need the corporation or company offers a basic product. To cater to their expectations and also to differentiate from competitors who tend to morph their products, corporations offer augmented products. Also, both the corporation and the competitors eventually tap the existence of potential products.
There is also a new 3 C's model emerging which centers on sustainability. This model is:
- Capability
- Consistency
- Cultivation
The idea behind the new 3 C's model revolves around the concept of shared value to the firm, the environment, and the community.
The Customer
Customers are the base of any strategy according to Kenichi Ohmae. Therefore, the primary goal is supposed to be the interest of the customer and not those of the shareholders. A company that is interested in customers will be interesting for its investors.
Segmenting by objectives
The differentiation is done in terms of the different ways that various customers use a product.
Segmenting by customer coverage
This segmentation normally emerges from a trade-off study of marketing costs versus market coverage. The corporation’s task is to expand its range of market coverage.
Segmenting the market once more
Competitors are likely to be looking at the market in similarly. Over time, the effectiveness of a given initial strategic segmentation will tend to decline.
The Competitors
Stratigies based on competition should be constructed by looking at sources of differentiation in functions.
Capitalizing on profit and cost structure differences
Firstly, the difference in the source of profit might be exploited, from new products sales etc. Secondly, a difference in the ratio of fixed costs and variable costs might also be exploited strategically.
Hito-Kane-Mono
Stands for people, money and things. The thought is that streamlined management is achieved when these three critical resources are in balance. Of the three critical resources, funds should be used last. The corporation should first look at management talent. Once the hito have developed creative and imaginative ideas, the kane should be given to the specific strategies and programs generated by the managers.
The Corporation
Selectivity and sequencing
The corporation does not have to lead in every function. If it can gain an advantage in one function, it will eventually be able to improve its other functions.
Make or buy
With rising labor costs, there may be a decision for a company to subcontract a major share of its operations. If the competiton can't shift production to subcontractors and vendors, the difference in labor cost or in the company's ability to cope with market fluctuations may have significant implications.
See also
5C Analysis under Situation analysis
Bibliography
- Kenichi Ohmae, The Mind Of The Strategist: The Art of Japanese Business, McGraw-Hill, 1991