3 C'S FRAMEWORK

A critical review of 3 C's framework



A critical review of 3 C's framework

The 3Cs model is a business model, which analyzes the success factors that are needed for business. Kenichi Ohmae developed this model, known as a successful corporate and business strategist. This model focuses on 3Cs, needed for success of business. These include:

The corporation

The customers

The competitors

The corporation

The Company's strategy should aim at maximizing the benefits of the Company, relative to competitors in areas most critical to achieving the industry.

Selectivity and coherence

In order to win the competition, companies do not need to be a leader in all functional areas important to the industry. If it can achieve decisive superiority in the most important area, it will be able to beat the competition in all other areas which are necessary for average for the industry level.

The issue "make or buy"

In the case of growing costs, the most critical decision for a company is deciding for the subcontractor to perform much of their domestic and manufacturing operations. In this way, company can achieve sustainable cost leadership, if competitors are not able to respond promptly to changes in its own cost structure. Another source of cost leadership in outsourcing may be the ability to change output in response to changes in demand (Ackerman, Brown, 2005, p.89).

Improving cost-effectiveness

Improving cost-effectiveness can be done in three main ways. First is to be efficient to reduce the basic costs than competitors can do. The second method is to be more selective in the choice of received orders from customers, manufactured products and their functions.

This suggests a selective approach, which is considered important for the company's economic activities, so that even with the elimination of separate directions, the total costs will be faster than revenues. The third method is to use similar key features, together with other business units or even companies. Experience shows that often there are situations in which such sharing provides significant advantages (Mulcaster, 2009, p. 68).

The customers

Customer orientation is the foundation of any strategy. There is no doubt that a priority of the corporation shall be in the interests of its clients, rather than shareholders or other parties. In the long term, corporations are genuinely interested in investing.

Segmenting by objectives

Differentiation should be built because different users use and get goods in various ways. This should be the guiding principle of segmentation, and they should allocate these groups to develop proposals for their specialty.

Segmentation of market coverage

The selected segments should not be too small. Strategic segmentation should be based on the study and comparison with the costs of marketing to potential market size. There is always a critical point, after which the ratio of profits and costs begin to decline (decreasing marginal effectiveness). Therefore, the task of the Company is to search for the optimal scale of coverage of the market. The relative marketing costs must not exceed the level of similar costs of major competitors (Mulcaster, 2009, p. 68).

 Re-segmentation of the market

In the case of a highly competitive market, the Company and its competitors are likely to segment the market in similar ...