Strategic Triangle Model 3C Model Ohmae

Strategic Triangle 3C Model by Kenichi Ohmae

The Strategic Triangle Model, also known as the 3C Model, was developed by Kenichi Ohmae, a renowned Japanese strategist. This model emphasizes that a successful business strategy must focus on three critical factors: Corporation, Customers, and Competitors. These three elements together create a strategic triangle that helps businesses gain a sustainable competitive advantage.

The Three Core Components of the 3C Model

1. Corporation: Focus on the internal strengths and resources of the company.
2. Customers: Understand customer needs, segmentation, and preferences.
3. Competitors: Analyze competitors’ strategies and market positions.

Ohmae argues that only by balancing and integrating these three aspects can a company achieve a sustained competitive edge.

Understanding Customers in the 3C Model

Client-focused strategies form the foundation of any business approach. Prioritizing the interests and needs of customers leads to greater customer satisfaction and, ultimately, higher shareholder value. Key approaches to customer analysis include:

Segmenting Through Goals

Segment customers based on how they use your products or services. This method reveals different value drivers and purchasing motivations.

Segmenting by Consumer Coverage

Optimize market coverage by analyzing marketing expenditures against the reach and effectiveness of different sales channels or geographic regions. Avoid over-investing in areas with diminishing returns.

Segmenting the Marketplace

In competitive industries, companies and their competitors often segment markets similarly. Over time this segmentation’s effectiveness may reduce, prompting refocus on critical customer groups and tailoring offerings accordingly.

Monitoring Changes in Customer Mix

Market dynamics shift the distribution of customer types over time, influenced by factors like sales channels, customer size, and behavior. Effective strategy involves reallocating resources to respond to these evolving patterns.

Company-Based Strategic Approaches

To win in the marketplace, companies must leverage their internal capabilities and focus on key functional areas

• Selectivity and Sequence: Gain a clear advantage in a critical business function, which can then lead to broader competitive strengths.
• Make vs. Buy Decisions: For example, subcontracting non-core processes to manage costs and capacity sensitivity strategically.
• Strengthening Cost Performance: Achieve superior cost efficiency by lowering fixed costs, optimizing product mix, and sharing resources effectively across the business.

Competitor-Centered Strategies in the 3C Model

Ohmae emphasizes differentiation by analyzing competitors within key functions such as procurement, development, sales, and after-sales service.

• The Role of Branding: When functional differences are minimal, investing consistently in branding and marketing can create meaningful differentiation.
• Profit vs Cost Structures: Smart pricing and operational tactics can leverage a company’s cost structure to outmaneuver competitors in different market conditions.

Hito-Kane-Mono: Balancing People, Money, and Things

A core Japanese business principle highlighted by Ohmae is the harmony of Hito-Kane-Mono – which means People, Money, and Things (resources). Efficient management occurs when these assets are aligned without waste:

• Invest in skilled human resources first.
• Allocate capital last, supporting effective systems and innovations.
• Avoid excess cash that cannot be prudently managed.

Applying the 3C Model in Different Industries

The principles of the 3C model can be tailored for specific sectors:

Tech Industry

• Corporation: Focus on innovation capabilities and R&D resources.
• Customers: Segment users by tech-savvy levels or usage patterns.
• Competitors: Monitor rapid technological shifts and emerging startups.

Retail Industry

• Corporation: Optimize supply chains and store operations.
• Customers: Segment by demographics and purchasing behavior.
• Competitors: Benchmark pricing, promotions, and in-store experience.

Manufacturing Industry

• Corporation: Strengthen production efficiency and quality control.
• Customers: Understand B2B clients’ production cycles and demand.
• Competitors: Analyze cost structures and capacity flexibility.

3C Model Quick-Reference Matrix

Component	Focus Areas	Strategic Questions	Key Actions
Corporation	Capabilities, Resources, Processes	What are our strengths? Where can we excel?	Invest in core competencies, streamline operations
Customers	Needs, Segmentation, Behavior	Who are our key customers? What drives their choices?	Analyze segments, tailor products and marketing
Competitors	Market Position, Strategies, Differentiators	Who are our rivals? How can we differentiate?	Benchmark competition, innovate, create unique value

Step-by-Step Guide to Implementing the Strategic Triangle Model

1. Analyze Your Corporation: List your core strengths and weaknesses.
2. Understand Your Customers: Segment your customer base by behavior, needs, and profitability.
3. Examine Competitors: Identify key competitors and their strategic moves.
4. Integrate Insights: Find where your company can uniquely meet customer needs better than competitors.
5. Develop Focused Strategies: Choose select business functions to lead and differentiate.
6. Balance Resources: Align people, money, and assets in strategic priority areas.
7. Monitor and Adjust: Continuously track market and competitor changes to refine your approach.

Additional Resources for Business Strategy and Growth

Explore these tools to build on the 3C model insights and accelerate your business success:

• Small Business Growth Strategy Pack
• Customer Retention and Loyalty Strategy Pack
• Marketing and Promotion Strategy Pack
• Balanced Scorecard and Strategy Map Toolkit

Summary

The Strategic Triangle Model by Kenichi Ohmae guides businesses to focus strategically on the intersection of Corporation, Customers, and Competitors. By carefully balancing these three critical areas, companies can craft distinctive strategies, allocate resources effectively, and sustain competitive advantage in dynamic markets.

Use the framework as a continuous diagnostic tool and strategic guide. Apply a customer-centric lens, leverage organizational strengths, and stay vigilant about competitors to win in your market.

To deepen your strategic planning and accelerate results, consider leveraging the Small Business Growth Strategy Pack that offers proven business frameworks, tools, and step-by-step guidance tailored for business professionals.