3Cs model

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:

1. The Customer
2. The Competitors
3. 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:

1. Capability
2. Consistency
3. 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 corporation 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 market costs versus market coverage. The corporation’s task is to expand its range of market coverage.

Segmenting by Competition

Competitors are likely to be looking at the market in similarly. Over a period of time, the effectiveness of the current strategy will tend to decline.

The Competitors

Stratigies based on competition should be constructed by looking at how the functions of your organization differ from those of your competition.

Capitalizing on profit and cost structure differences

Firstly, the difference in the source of profit might be exploited. Secondly, a difference in the ratio of fixed costs and variable costs might also be exploited.

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 company does not have to win in every function of its oporations. 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 handle 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

External links

• kohmae.com