Ohmae’s 3C Model

It is easy to overcomplicate things in business. If you are a business owner or manager, you know this fact all too well. With a whole world of potential customers to serve, and an endless stream of products and services which you could offer to those customers, it is easy to get in ‘over your head’. Rather than focusing on what it is that you do best, you might feel the pull of going in a number of different directions while hoping to hit it big.

Ohmae’s 3C Model

Of course, as you probably know deep down, it is usually best to keep things as simple as possible. By using the 3C’s Model presented by Kenichi Ohmae, you will have a great chance to keep things simple as you focus on just three key components that are sure to be critical to your success moving forward. According to Ohmae, the three key players in any business strategy are the C’s listed below –

  • Customer
  • Competitors
  • Corporation

That’s it. Of course, business in the real world feels far more complicated than that, but from a strategic standpoint, those are the players you need to be concerned with for the most part. If you can bring together those 3 C’s successfully in the strategy that you use for your organization, you should be able to find your way into the right part of the market.

In the content below, we will take a closer look at each of these three C’s of business success.

The Customer

It all starts with the customer. This probably isn’t a revolutionary thought to you, as most people who are in business understand that they need to take care of their customers first and foremost. However, you need to ask yourself, are you truly doing everything you can to please your customers above all else? It is easy to lose track of this goal while worrying about things like the bottom line and the satisfaction of your owners or shareholders.

The Customer

Despite those potential distractions, it is critical that you manage to keep your customers front and center in everything that you do. To take this concept a step further, you can work on ‘segmenting’ your customers in order to break them down into like groups which behave in a similar manner. For instance, you can divide up your potential customers by how those customers are going to be using your product. No matter how you choose to segment the market for your analytical purposes, it is always important that you precisely identify which parts of the market you are going to target with marketing efforts.

The Competitors

All businesses need to have a clear understanding of who the competition is, and what that competition is capable of doing. Do you know where you stand in the market related to your competition? Is the competition trying to catch up to you, or vice versa? Finding weaknesses in your competition that can be exploited is at the heart of this form of business strategy. For instance, a smaller competitor might not be able to compete on cost with a bigger firm, so you might be able to wage a ‘price war’ in order to gain market share successfully against your smaller competition.

The Competitors

Of course, this is just one example, and there are nearly endless ways in which you can use the weaknesses of your competition to claim a bigger piece of the market for yourself.

A smart business will spend a considerable amount of time thinking about the competition that they face. There is really no such thing as a market without competition – and if one does exist, it will not exist for long. Of course, you don’t have to drive your competition out of business in order to succeed, you only have to take a big enough piece of the market to protect your bottom line.

The Corporation

The structure of the corporation (or business) as a whole is going to say a lot about operations and how they are run into the future. One of the key points that is made by Ohmae in this model is the fact that the corporation doesn’t have to be excellent at all parts of the business – at least not at first. As long as there is something about the company that allows it to rise above the competition successfully, the functions that might not be up to standard initially can gradually be improved over time.

One of the big choices that needs to be made within the corporation that will have a significant impact on the success of the business over the long run is the decision of whether to make things in-house or purchase them from suppliers.

The Corporation

The components that go into making a specific product need to be reliably sourced for a competitive price, but that sourcing can be brought within the company if the situation is suitable. Most of the time, the right plan will be a mix of buying and creating, based on the costs and availability of suppliers in the local area. It is the companies who are able to make the right choices on these tough decisions that will usually rise to the top at the end of the day.

The 3C’s provide a great framework within which you can think about your business. This isn’t the most complex model for making strategic business decisions, but that is exactly the point – it doesn’t have to be. When businesses set out to make good decisions that can take them into the future prosperously, there is a dangerous amount of information that can be used. The overloading of information can lead to cloudy decisions and plenty of mistakes along the way. By boiling business down to these three basic C’s – the customer, competitors, and corporation – you should be able to think clearly and make sound, logical strategic decisions on a consistent basis.

You can read more about the 3C’s Model in our free eBook ‘Five Strategy Tools to Gain Competitive Advantage’. Download it now for your PC, Mac, laptop, tablet, Kindle, eBook reader or Smartphone.

Key Points

  • The 3C’s Model developed by Kenichi Ohmae offers a strategic look at the factors needed for success. These are: the customer, the competitors, and the corporation.
  • The primary goal should be the interest of the customer and not those of the shareholders because a company that is genuinely interested in its customers will automatically take care of shareholder interests.
  • All businesses need to have a clear understanding of who the competition is, and what that competition is capable of doing.
  • The corporation does not have to excel in every function to win. If it can gain a decisive edge in one key function, it will eventually be able to improve its other functions which are now average.
  • Only by integrating these three, can a sustained competitive advantage exist.

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