What is the 3C business analysis model and how is it applied in marketing?

What is the 3C business analysis model and how is it applied in marketing? The 3C business model was created by Kenichi Umaye, a management consultant, and has been used as a strategic business model for years and is often used in Internet marketing today.

This method makes you focus your analysis on the 3C or strategic triangle: Customers, Competitors, and corporations. By analyzing these three elements, you will be able to find the key success factor (KSF) and create a suitable marketing strategy. Many variants of this method have been derived due to its simplicity.

You can start with any of the 3 C’s, but it is recommended to analyze your customers first, then your competitors, and finally your company.

If you analyze the company first, you will use the company’s data as a benchmark for analyzing competitors and customers. Understanding the customer’s perspective is important in marketing. So first know the customer, then the competitors in your market and finally the company.

Understanding the 3C business analysis model

The 3C business analysis model was created by Kenichi Umaye, a Japanese business strategist and organizational theorist in 1982.

This model first appeared in Umayya’s book The Mind of the Strategist: The Art of Japanese Business, where he discussed the thought processes and planning techniques of some of the world’s most successful companies.

The book was hailed for its ability to empower modern decision-makers to exercise courage, initiative, and problem-solving. Indeed, Harvard Business School professor Michael Porter said Umayya’s book is “a fascinating window into the mind of one of Japan’s top strategists … full of ideas about how to improve strategic thinking.”

Essentially, Umayya stated that business success is based on a combination of the following:

• Customer needs
• Strengths of the company
• Products and services offered by competitors

When a company takes the time to integrate all three components in harmony, it can create a sustainable competitive advantage. But when one of these components is out of balance, the company’s success may be jeopardized. In the following sections, we’ll take a closer look at customers, companies, and competitors.

First C: Customer Analysis

Conducting in-depth consumer research is the best way for you to understand how to appeal to your target market. The ability to create catchy phrases and creative ads will be your most important goal.

Demographic information plays an important role in this analysis. Defining your business’s target market and what they want will greatly improve the success rate of your marketing strategies once they are put into motion.

Data such as disposable incomes, likes, dislikes, where they get information, whether they make impulse purchases, and even how they respond to customer service or a product already available is invaluable.

Use responses from in-depth interviews, questionnaires, and user tests to gain consumer insights. Use this insight to create concept diagrams, communication plans, and personas that promote your company and help you spread your product or service to the world.

Businesses need to know their customers intimately for their marketing strategies to connect with them on a meaningful level. It starts with research and a few questions, including:

• What is the demographic of the target audience? In other words, who are the customers the business wants to target?
• Why do they decide to buy? Are they motivated by value, economics, or status? What other problems might they be trying to solve?
• What are the different target audience segments and how can you market to them effectively? For example, a consumer who drinks coffee to stay awake needs a different strategy than a consumer who drinks it socially in a cafe.

If they know and trust the company you are promoting, their response will be much more tangible.

Second C: competitor analysis

You can use the appropriate websites and search engine results to discover competing brands and companies in addition to the list of data your employer provides. Comparison websites are popular in every industry and make it quite simple to review competitors’ products and services.

It is important to note that, for example, a hamburger shop will have competitors not only in the fast food industry but also in the restaurant industry and supermarket industries. You should narrow down your results so you can focus more on how you compete with the top three to five competing businesses.

After identifying your main competitors, analyze them. How much effort do they put into their website? What expressions do they mainly use? What do they offer? What tools (eg, newsletters and SNS) do they use to invite users to their website? What is their general marketing logic? Ideally, you should examine competitors from multiple angles to fully understand their marketing activities.

Analyzing competitors is mainly done by visiting their websites, subscribing to their newsletters, visiting their stores, and/or receiving their services (exploratory analysis). Additionally, you can conduct a user test to compare your client’s company to its competitor.

According to Umayeh, competitor-based marketing strategies involve looking for a point of difference in purchasing, engineering, sales, or service. This can be achieved in several ways:

Investing in brand image

Umayya noted that companies such as Sony and Honda were able to outsell their competitors in the Japanese market due to heavy investment in advertising and consumer relations.

Hito-kane-mono

Japanese business planners believe in the concept of Hito-Kane-mono, which simply means “people, money, and things (assets)”. As a point of competitive differentiation, businesses can ensure that these resources are in balance without waste or excess. For example, managers who receive more budgets than they can properly spend tend to waste that money unnecessarily. In this case, Umayeh argues that managers must first define their ideas and then adjust the budget accordingly.

Differences in profit and cost structure

Various sources of profit can also be exploited, such as the profit seen in the sale of a new product or value-added service. Large firms with lower fixed-cost ratios can also lower their prices in a stagnant market to gain market share.

Third C: Company Analysis

The last step you need to take is to analyze your client company. You need to know what marketing strategies have worked for them in the past and what ideas have failed. The best way to do this is again from the customer’s perspective.

From the results of the customer and competitor analyses you have done so far, list the company’s “strengths” and the “resources” that produce them. If you have trouble finding them, ask real customers what they think. By asking why they prefer your customer’s product, you can gain points to compare with competitors and how customers respond to current marketing activities.

It helps if you can check your web analytics data with a tool like Google Analytics. Content that you think is engaging usually has a high value for average session duration and PV.

Based on such data, find out which pages of the company’s website users are interested in and which pages are not. This can be a clue about the products and services available according to the needs of the users.

The company itself must also look internally to design strategies aimed at maximizing strengths relative to competitors. This includes a combination of short-term and long-term strategies, including:

Expertise

Instead of specializing in everything, businesses should always identify one or two areas to find expertise.

Conclusion

The 3C business analysis model suggests that a business should focus on three key factors for success: the company, the customer, and the competitors.

The strengths of the 3C business analysis model lie in its simplicity, practicality, and emphasis on efficiency to reduce waste.

Customers are very important to the success of the 3C analysis business model, determining the strategies developed for the competitors and the company.

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