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Kenichi Ohmae’s 3Cs model shows how a business can be successful in the market by having control over the invisible aspects of that market.
5 min read
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In this article we’ll be looking at a framework that was devised to assist companies in developing strategic focus to bring about success. It touches on three subjects that your business should be effective and knowledgeable in and looks at how each may impact your growth.
What is Ohmae’s 3Cs model?
The 3Cs model is a framework designed to help companies compete successfully within a market.
The idea is to focus exclusively on the following 3Cs:
- Customer
- Competitors
- Corporation
If the 3Cs are embedded into your strategy and everything somehow relates to one of them, then you stand a much better chance of success than if you are ignoring one or more.
What is Ohmae’s 3Cs model used for?
The 3Cs model is used to analyse and determine the skills and focus a business needs for success.
What does Customers mean in Ohmae’s 3Cs model?
Customer is a key part of the 3C model and that should come as no surprise. It’s important you understand and develop your product/service with the customer in mind. Some activities and questions to ensure you are customer-centric may include:
- How do you segment your customers?
- Have you developed buyer personas for your customer groups?
- What are the common buying decisions your prospects or customers make?
- What is the demographic of your buyer?
- What do they value about the product or service you provide?
- Are you getting regular feedback or a satisfaction score from them?
Of the above, your segmentation is the most important. How you split your customers, by usage, demographic, product, is a key factor in your understanding and approach to how to engage them successfully.
You may also consider:
- Which key customer KPIs you want to include in your reports.
- Running a Five Forces analysis to understand your customer power in relation to other factors.
- Establishing the right pricing strategy for your customer.
Customers are so important that it’s not just the 3C model that refers to them as a critical success area, you may also have encountered Value Disciplines that shares the same idea of needing to be good, or excellent at, the concept of customer focus.
What does Competitors mean in Ohmae’s 3Cs model?
It goes without saying that competitors can have a big impact on your performance and behaviour, so no surprise that the second C in the 3Cs model focuses on this topic. In order to be successful, you need to know where you stand in relation to your competition. Some questions or activities to help you include:
- Have you created competitor profiles?
- What are your competitors’ USPs?
- Why do you win and lose sales?
- Do you have examples of their collateral?
- How big is their market share?
- What indirect competition do you face?
The key thing here is you ensure you have a clear differentiation between your own company and the competitors. Understanding their weaknesses can lead you to the right approach here. You may need to:
- Invest and develop your brand and public image to heighten your position within a market.
- “Hito-Kane-Mono” is a Japanese phrase relating to people, money & things. It’s used within the context of 3Cs to highlight that having the perfect balance between those resources results in no waste and a very efficient business.
You may also consider:
- Using Four Corner Analysis to estimate a competitor strategy.
- Running a Five Forces analysis to understand the threat of the competition in different forms.
Competitors are always a factor when you’re growing your business, so much so that a Competitor Based Pricing Model is often adopted by companies. It’s not as effective as Value Based, but worth considering when entering a market.
What is Corporation in Ohmae’s 3Cs model?
This C is all about looking inwards at your business and understanding the key factors that will ensure you are successful. Some questions may include:
- How cost effective are your processes?
- What do you specialise in as a business?
- What are your key strengths and weaknesses?
- What is the structure of your business and does it support your strategy?
There are two key factors in Corporation to consider:
- You don’t need to be excellent at all functions in the business to begin with so select your key differentiation functions and focus on those. The rest can follow once the chosen functions operate perfectly.
- Do you make or buy key products and services used to create your product?
You may also consider:
- Running a VRIO Analysis to determine what gives you a competitive advantage.
- Developing a SWOT for your business.
- Looking at strategic cost reduction to invest in growth areas.
It’s important to not do too much at once. Good strategy is as much about saying no to certain activities as it is about pursuing others.
What are the advantages to Ohmae’s 3Cs model?
Some advantages of the 3C model are:
- It’s simple and not overcomplicated.
- It helps focus and identify the key paths to success.
- It provides both an internal and external analysis.
- It helps frame conversations for management teams.
- It can be applied at a company level or a marketing level.
What are the alternatives to the Ohmae’s model?
The clearest alternative is Porter’s Value Disciplines Model. The Value Disciplines model is a business framework that looks at the three competitive areas a company needs to focus on in order to be successful.
Who invented Ohmae’s 3Cs model?
The 3Cs model was invented in 1982 by famous Japanese business strategist Kenichi Ohmae in his publication The Mind of the Strategist
