Use this framework to maximise your company's strength relative to the competition
Kenichi Ohmae is an academic, business consultant and organisational theorist. In 1991 he published a theory on competitive strategy in his book The Mind Of The Strategist: The Art Of Japanese Business.
Kenichi Ohmae began life as a nuclear scientist and subsequently became an organisational theorist and management consultant. He developed the Japanese theory of balancing people, money and things into a three-part strategy for business – customers, competitors, and the corporation. When these 3Cs are taken into account, a business strategy can be developed. Ohmae proposes an industry framework in which three elements are in balance:
Customers. The customer is at the heart of the 3C model. Not all customers are the same and Ohmae recommends segmenting them according to their different needs and behaviours. This requires considerable understanding of the customer base – who they are, how they use the products, where they live, their age, interests and use of competitive products.
Competitors. As always, it is important to understand competitors’ differential strengths. For some firms it may be a cost advantage while for others it could be their reputation and brand strength. Where possible it is important to understand how the players in the market collect value and make profits. In developing a strategy it is important to work out which are the competitors that you are aligned against – the ones that you need to beat. Crucial to this is determining exactly how you are going to beat them.
Company. If a company is to be successful it is important that it understands its strengths and weaknesses. It is likely that the company will have a range of different strengths. One of the strengths should be developed into a competitive advantage. Ohmae recognises that there are some things that companies find it difficult to do in which case they could be outsourced. If activities are outsourced it may be necessary to manage in-house costs in order to ensure there is no loss of competitive advantage.
As with most frameworks, the Triangle concept is simple but the intelligence required to achieve the balance between customers, competitors and company could be complex and very thorough. It is a framework in which other frameworks could help such as segmentation, competitor intelligence, and the competitive advantage matrix.