3C's Model

The 3C's Model is a business model, which offers a strategic look at the factors needed for success. It was developed by business and corporate strategist Kenichi Ohmae.

The 3C’s model points out that a strategist should focus on three key factors for success. In the construction of a business strategy, three main players must be taken into account:

Only by integrating these three, a sustained competitive advantage can exist. Ohmae refers to these key factors as the three C’s or strategic triangle.

There are certain needs that arise from the customer end. They include core benefit or service and expected product. Recognizing this need the corporation or company offers a basic product. To cater to their expectations and also to differentiate from competitors who tend to morph their products, corporations offer augmented products. Also, both the corporation and the competitors eventually tap the existence of potential products.

There is also a new 3 C's model emerging which centers on sustainability. This model is:

The idea behind the new 3 C's model revolves around the concept of shared value to the firm, the environment, and the community.

Clients are the base of any strategy according to Ohmae. Therefore, the primary goal is supposed to be the interest of the customer and not those of the shareholders for example. In the long run, 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.

The differentiation is done in terms of the different ways that various customers use a product. Customer thinking is not one of the prime functions for consideration.

This segmentation normally emerges from a trade-off study of marketing costs versus market coverage. There appears always to be a point of diminishing returns in the cost versus coverage relationship. The corporation’s task is to optimize its range of market coverage, geographically and/ or channel wise.

In fierce competition, competitors are likely to be dissecting the market in similar ways. Over an extended period of time, the effectiveness of a given initial strategic segmentation will tend to decline. In such situations it is useful to pick a small group of customers and reexamine what it is that they are really looking for.

A market segment change occurs where the market forces are altering the distribution of the user-mix over time by influencing demography, distribution channels, customer size, etc. This kind of change means that the allocation of corporate resources must be shifted and/ or the absolute level of resources committed in the business must be changed.

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