This article explains the 3C model by Kenichi Ohmae in a practical way. After reading you will understand the basics of this powerful strategy and competitive advantage tool.
What is the 3C model?
The 3C model of Kenichi Ohmae, a renowned Japanese strategy guru, is a business model which focuses on three key success factors for success.
3C model, the strategic triangle
Kenichi Ohmae states that these three factors must be in balance in the form of a strategic triangle.
This balance can lead to a sustainable competitive advantage.
These three key factors for success are:
- The Corporation
- The Customer
- The Competition
1. The corporation
The Corporation needs to focus on the maximization of its strengths. As a result, the corporation can influence the functional areas of the competition that are critical to achieve success within a certain industry.
Focusing on a key functional area may create a decisive improvement in other functions of the competition. (for example quality improvement).
By functional areas is meant for example culture, image, products, services, technology, etc. It is also important for a corporation to make informed decisions about subcontracting (capacity, cost structure, significant strategic advantages) and how effectively this can be realized with respect to cost reduction (selective purchasing, stock management, choice of commodities, use of automation).
2. The customer
The customers are the basis for any corporation according to Kenichi Ohmae.
Without a doubt, a corporation’s foremost objective ought to be the interests of its customers rather than those of its stock holders or other parties.
What is important are elements like needs, requirements, demands, problem areas, buying motives, value components, decision-makers, etcetera.
Segmentation of objectives (use of products) and customers (geography, age, social interests ) and the market (potential customers, competitors) are important for constructing and adopting a strategy.
3. The competition
According to Kenichi Ohmae these strategies can be constructed by looking at possible differentiation in functions such as purchasing, design, engineering, sales and maintenance.
One of the most important factors is image and this can provide the necessary power.
Both Sony and Honda for example, sell more than their competitors because they invest more in public relations and advertising.
Smaller corporations and organizations can use franchise concepts or low margins and make the necessary investments in service.
It’s Your Turn
What do you think? Is the 3C model, developed by Kenichi Ohmae applicable in today’s modern economy and strategy thinking? Do you recognize the practical explanation or do you have additions? What are your success factors for a good 3C model set up?
Share your experience and knowledge in the comments box below.
- Adetule, P. J. (2011). The Handbook on Management Theories. Author House.
- Ohmae K. (2005). The Next Global Stage. Pearson Education.
- Ward, D. (2005). An overview of strategy development models and the Ward-Rivani model. Economics Working Papers, June, 1-24.
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