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A key question that every business needs to able to answer is "What is our strategy?"
'Strategy' is part of everyday business language and is often used in the wrong context (e.g. 'Operational Excellence' is not [read more]
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Dr. Kenichi Ohmae, a Japanese organizational theorist and Strategy guru, proposed the 3C Model in 1982. The concept was published in his book, “The Mind of the Strategist: The Art of Japanese Business.”
The Ohmae 3C model, also known as “the Strategic Triangle,” is a strategic framework that assists in developing the fundamentals of Business Strategy for any organization.
Ohmae’s insights stemmed from his extensive experience in consulting and his deep understanding of the global business landscape, which led him to advocate for a balanced approach that integrates crucial elements to achieve competitive advantage.
The framework facilitates providing strategic insights into the factors essential for the success of an enterprise. The model argues that effective Strategic Planning hinges on leveraging organizational strengths through corporate-focused strategies, aligning these strengths with market demands via customer-centric approaches, and surpassing competitors by employing competitor-focused tactics.
The focus of the model is on customers instead of shareholders, based on the premise that customer centricity ultimately leads to the accomplishment of shareholders’ interests.
Ohmae’s 3C Model (Strategic Triangle) has its applications in Strategic Planning, Market Analysis, and guiding Decision-making processes.
The 3C Model makes a case for the executives to carefully comprehend 3 core elements before devising their strategy.
- Customers
- Company (or Corporation)
- Competitors
These fundamental components are critical to laying the groundwork for a successful Business Strategy. Organizations that can effectively integrate these 3 C’s into their strategy are capable of penetrating the appropriate segment of the market.
Each C is independent, but has an impact on others—e.g., a rival launching a cheaper product that completely satisfies your customers’ needs compels you to reassess your Corporate Strategy. Let’s discuss the core elements a bit further.
Customers
The customer is a critical component of the Ohmae’s 3C model (Strategic Triangle). Maintaining a customer-centric approach is crucial when developing and comprehending a product or service. It is imperative for the organization to comprehend, fulfill, and attend to the requirements, problems, expectations, and buying motives of its clientele as opposed to those of its shareholders. This can be done by using various digital tools, questionnaires, and techniques.
According to Ohmae’s paradigm, customer strategies serve as the fundamental basis for all other forms of strategies. Without a firm customer-centric strategy, organizations fail to meet the demands of shareholders and other stakeholders. Incorporating customers’ requirements, problems, expectations, buying motives, and decisions into a firm’s strategy simplifies its course to achieve growth. For instance, Apple focuses on user experience, innovation, and design to meet customer expectations for high-quality technology products.
Company
The next element of the Ohmae 3C model pertains to developing an organization’s internal resources to compete effectively. The focus is on the company’s internal strengths and capabilities, including its resources, skills, and organizational structures. By prioritizing the optimization of its competencies and internal resources, an organization can foster competition, which is essential to attaining success.
The ability to make well-informed decisions is regarded as a critical element that can address several challenges. Organizations can make more informed decisions by concentrating on a certain niche or a critical functional domain (e.g., products, services, technology, organizational culture, and so on). Excellence in one functional domain can pave the way to excel in and build strengths in other domains or functions. For instance, Toyota leverages its expertise in Lean Manufacturing and Continuous Improvement (Kaizen) to maintain efficiency and high quality in its operations.
Competitors
Competitors have a huge influence on an organization’s objectives, methodologies, operations, effectiveness, and standing. Analyzing the competition involves understanding the market landscape, competitors’ strategies, strengths, weaknesses, and potential moves. An exhaustive competitive analysis of the market helps a company identify its direct and indirect rivals.
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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