The 3C Model was introduced in 1982 by organizational theorist and Japanese Strategy expert Dr. Kenichi Ohmae. This concept was expounded upon in his book entitled "The Mind of the Strategist: The Art of Japanese Business."
The Ohmae 3C model, also known as "the Strategic Triangle," assists in developing the fundamental components of the Business Strategy of an organization.
Ohmae's viewpoints emerged from his comprehensive understanding of the international business landscape and his substantial experience in consulting. Consequently, he espoused the adoption of a well-rounded approach that integrates essential elements to achieve a competitive advantage.
The framework facilitates the generation of strategic insights pertaining to the pivotal determinants of success for an organization. The model posits that the effectiveness of Strategic Planning is dependent on three critical elements: leveraging organizational strengths by adopting customer-centric approaches, aligning these strengths with market demands by implementing corporate-focused strategies, and surpassing competitors by executing competitor-focused approaches.
The model prioritizes customers over shareholders, operating under the assumption that Customer Centricity ultimately leads to the satisfaction of shareholders' interests. The 3C Model (Strategic Triangle) developed by Ohmae is applicable to numerous fields, such as Strategic Planning, Market Analysis, and Decision making.
According to Ohmae’s 3C Model, executives must have a comprehensive understanding of 3 fundamental elements prior to formulating a strategy.
- Customers
- Company (or Corporation)
- Competitors
It is critical to incorporate these fundamental elements to devise a successful Business Strategy. Organizations that can effectively integrate these 3 C's into their overarching strategy develop the capability to penetrate the intended market segment.
While functioning independently, each C exerts an impact on the others. For example, a reassessment of your Corporate Strategy becomes imperative when a competitor launches a more cost-effective product that completely satisfies the needs of your clientele. Let’s explore the foundational elements further.
Customers
The consumer is an essential component of Ohmae's 3C paradigm. Maintaining a customer-centric approach throughout the entirety of the product or service development process is of utmost importance. Prioritizing the understanding, fulfillment, and resolution of the needs, concerns, and expectations of its clientele over those of its shareholders is of utmost importance for the organization. This can be achieved by employing a diverse range of digital tools, questionnaires, and methodologies.
According to the Ohmae's 3C model, customer strategies serve as the fundamental basis for all other strategies. Organizations failing to implement a robust customer-centric strategy will fail to meet the demands and expectations of their stakeholders, including shareholders. The profitability and growth is facilitated when a company's strategic approach incorporates the desires, concerns, expectations, purchasing motivations, and needs of its customers. As an illustration, Apple places emphasis on design, innovation, and user experience with the aim of meeting the exacting criteria that consumers hold for technological products.
Company
This element pertains to the enhancement of an organization's internal resources with the intention of contending effectively. The emphasis of this element is on internal capabilities and strengths of the organization, including its organizational structures, resources, and skills. By prioritizing the development of its internal resources and capabilities, a business can navigate competition better.
The capability to develop informed judgments is regarded as a critical component to efficiently tackling a wide range of challenges. Businesses can improve their Decision-making processes by focusing on a particular niche or critical functional domain, such as organizational culture, products, services, or technology. Achieving success in a specific functional domain can act as an impetus for the cultivation and achievement of excellence in other functions or domains. To provide an example, Toyota leverages its expertise in Lean Manufacturing and Continuous Improvement (Kaizen) to guarantee optimal performance and operational efficiency.
Competitors
Competitors exert a significant influence on the objectives, methodologies, operations, effectiveness, and standing of an organization. In order to perform a competitive analysis, one must possess a comprehensive understanding of the market landscape, as well as the strategies, strengths, weaknesses, and potential moves of the rivals. By conducting an exhaustive competitive analysis of the market, a business is able to differentiate between and compete with its direct and indirect competitors.
Interested in learning more about the strategies and approaches under Ohmae's 3C model? You can download an editable PowerPoint presentation on Ohmae's 3C Model (Strategic Triangle) here on the Flevy documents marketplace.
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