3C’s Model by Kenichi Ohmae
The 3C’s model describes the three key factors for the creation of successful business strategies. This strategy was developed by Kenichi Ohmae and after the development of this strategy, he was named Mr. Strategy! Kenichi Ohmae is one of the most well known world’s leading business and corporate strategists.
The 3C’s model provides a strategically look at the factor which is required for the success in any business process. It points out three key factors for the success. In the construction of any business strategy, these three models must be taken into account. They are:
- The Corporation.
- The Customer and
- The Competitors.
Ohmae considered these three factors as the three C’s or strategy triangle.
The corporation: The Corporation needs strategies for maximizing its strength relative to the competitions in functional areas that are very difficult to achieve success in the industry. The corporation plays roles as:
1.1 Selectivity and sequencing
1.2 Make or buy
1.3 Cost-effectiveness
Selectivity and Sequencing: The Corporation does not have to lead in every function to win. If it gets gain decisive then only it will improve its other functions which are below average.
Make or Buy: It becomes a critical decision for a company to subcontract a major share of its operations. If its competitors are approaching then it make use of subcontractors or vendors to make the function at earliest as possible, this leads to difference in cost structure.
Cost-effectiveness: Improving the cost-effectiveness can be done in three ways;
By reducing basic cost
By exercising greater selectivity
By sharing certain key functions with other companies
The Customer: clients are the base of any strategy, means a company that is genuinely interested in its customers will be interesting for its investors and take care of their interests automatically. Segmentation is helping to understand the customer.
Segmentation by objectives: here differentiation is done on the basis of the ways the customer use products.
Segmentation by customer coverage: here differentiation is made on the basis of coverage of a product over the market.
The competitors:
The strategies based on competitors can be built on by looking at various available sources of differentiation in functions. Some of the aspects are:
Power of Image: it may be the only source of differentiation in between product performance and mode of distribution.
Hito-Kane-Mono: It is a Japanese business favourite phrase, standing for people, money and thing. They believe that a company can achieve its goal when these three factors are well managed and utilised.
Written by: Matt
We also suggest this relevant article if you have time: Blue Ocean Strategy by W. Chan Kim
Some other similar articles
Tagged as 3C’s model, business process, business strategies, competitors, cost-effectiveness, customers, Hito-Kane-Mono, Kenichi Ohmae + Categorized as Business, Economy articles, Ladership & Management