Ohmae's 3Cs: customer, competitors, company

The 3Cs, or strategic triangle, were formulated by Kenichi Ohmae, a former McKinsey partner in Tokyo, in his book "The Mind of the Strategist". The three corners of the triangle all start with a C: customer, competitor, corporation.

• The customer. Who they are, what they need, how they choose, how much they are willing to pay, and which segments they fall into.
• The competitors. Who they are, what they offer, at what price, what their strengths are and how they would react.
• The company. What it knows how to do, its resources, its costs, its brand, its constraints.

For Ohmae, strategy is not about describing these three players but about finding a position: a need the customer values, that the company can serve, and that competitors serve less well. An advantage the customer does not notice is worth nothing, and a need everyone serves equally leaves no margin.

In consulting interviews, the framework is a starting point for open questions, launching an offer, responding to a competitor, repositioning, and it makes up half of the market entry framework.

The tree shows the three corners and the questions to ask about each. What a tree shows poorly is that the answer is in none of the branches. It is found by bringing them together two by two.

• Customer and company: what can we do that the customer wants?
• Customer and competitors: which needs do current offers serve poorly?
• Company and competitors: where are we better, or cheaper?

A solid opportunity answers all three questions at once.

Here is the prompt. Banque du Ponant, a regional bank, is losing self-employed customers (tradespeople, consultants, independent professionals) to online banks. It wants to launch an offer to keep them. What should it propose?

The customer. You ask what the self-employed expect from a bank. The interviewer quotes a survey by the bank: their first criterion is time spent on admin, ahead of price. They want an account, a way to issue invoices and track their cash. You ask whether they have other needs. Yes: a third of them borrow at least once every three years, for a vehicle or equipment.

The competitors. Two types of players. Online business banks charge €10 a month, offer an account and an invoicing tool, and do not lend. Traditional banks charge €30 a month, with an adviser and lending, but no tool.

The company. Banque du Ponant has 40,000 self-employed customers at €30 a month. It knows how to lend and knows its customers' history. Its IT is old: building its own invoicing tool would cost €5M.

The intersection. No competitor brings together what the customer wants. Online banks have the tool without lending, traditional banks have lending without the tool. Banque du Ponant can offer both, and it has an advantage online banks lack: it already knows its customers' accounts, so it can answer a loan request quickly.

The numbers. An offer at €20 a month, €240 a year, sits between the two. To pay back €5M of development, it would take about 21,000 subscribers for a year. That is half of current customers, which is a lot. So you suggest not building the tool but partnering with an invoicing software publisher, at a much lower cost.

Recommendation. Launch an offer at €20 a month that combines the account, an invoicing tool supplied by a partner and a lending decision within 48 hours. The risk is moving customers who were paying €30 without complaint down to €20: it should be offered first to customers showing signs of leaving.

The framework breaks when it turns into three lists. This is the most common flaw: the candidate lists questions about the customer, then about competitors, then about the company, gets answers, and does nothing with them. The value of the framework is in bringing them together, which nothing in its form forces you to do.

It also breaks because it contains no numbers. It can conclude that an offer is well positioned without saying whether it is profitable. In the example, the positioning was right and the in-house development project was not: the calculation showed it, not the triangle.

Third limit: it fits everything, so it distinguishes nothing. You can lay it over a launch case, a sales decline or an acquisition without changing a thing, which is the sign of a structure that is too generic. An interviewer hearing it for the third time that day learns nothing about your ability to think through their case.

Fourth limit: it forgets what surrounds the triangle. Regulation, technology, distributors and partners are not in it, even though they sometimes decide everything. Some variants add a fourth or fifth C to cover them.

Finally, it is static. It describes competitors as they are, not what they will do once your client has moved.

Turn the three Cs into a single question that you announce instead of the framework: "I would like to understand what these customers expect that nobody offers them today, then check that we are well placed to give it to them." You cover the three corners, in an order that leads somewhere.

Start with the customer, almost always. Their needs give the yardstick for judging everything else: a company strength only counts if the customer cares about it.

Segment early. "The customer" does not exist. In the example, the self-employed who borrow and those who never do have different reasons to stay. Always ask whether all customers want the same thing.

Add the missing number. Once the position is found, check that it pays: a price, a number of customers, a cost. That is what separates an idea from a recommendation.

Finally, think about the response. Ask what competitors will do once the offer is launched, and whether your advantage can be copied in six months.

In the FrameLab course, the 3Cs are part of the business mental models: a reminder not to forget a player, which you slip into an issue tree built for the case. To judge the attractiveness of the market itself, Porter's five forces go further. The interview questions will give you open prompts to practise going from three lists to a single answer.

An independent city-centre bookshop is losing sales to online retailers. Its manager asks you how to reposition. Fill in the three Cs in a few lines, then state the position that follows.