Meaning of 3C analysis

In recent years, every company has been practicing planning

marketing strategies

while analyzing the market, customers, and competitors. Among these, a framework called “3C analysis” is often used, especially in the environmental analysis phase. We will introduce basic explanations and hints about 3C analysis that will be useful for those who have heard of it but are not familiar with it, as well as those who have been practicing it but have not had much success and would like to know the tips.

What is 3C analysis?

3C analysis is

a framework

for analyzing the environment surrounding your company and its products and services. The analysis results will be used for planning marketing strategies, etc.

3C analysis is read as “three sea bunseki” or “san sea bunseki.” 3C is an acronym for the three initials of “Customer (market/customer),” Competitor, and Company. It is said that by collecting and analyzing information on each of these three elements, you can thoroughly analyze the marketing environment surrounding your company.

Origin of 3Cs The concept of 3C analysis was originally invented by Kenichi Ohmae, a management consultant. It became popular after being described in his 1982 book “The Mind of the Strategist.”

Meaning of 3C analysis

3C analysis is a framework often used in marketing strategy planning. However, there may be cases where people are doing 3C analysis without knowing the meaning or effect of doing it.

By thinking carefully about what you’re doing and what you’re trying to get, you’ll be able to make more meaningful analysis. So, I would like to introduce what you can get by performing 3C analysis.

Make it easier to clarify your company’s points of differentiation

In 3C analysis, you analyze your company after analyzing the market, customers, and competition, so you can perform analysis while comparing with the market, customers, and competition. By being able to understand your company’s strengths and weaknesses more objectively, it becomes easier to clarify your points of differentiation. Once you understand this clearly, it will be easier to plan future measures, such as putting your strengths to the forefront and devising strategies to compensate for your weaknesses.

When devising a marketing strategy that allows you to formulate a marketing strategy from a multifaceted perspective, if you only look at your company’s products and services, you will only be able to devise measures from a narrow perspective. What is necessary for successful marketing is to analyze the environment surrounding your company and your internal environment from multiple perspectives and formulate a marketing strategy. 3C analysis allows you to have a multifaceted perspective, so you may be able to formulate strategies from all angles. It can be said that the more objectivity of a strategy, the more likely it is to be realized.

You can decide the direction your company should take

3C analysis can help you plan your marketing strategy and determine the direction your company should take. Moreover, since the strategy is based on an accurate understanding of the environment, rather than just pushing out what the company wants to do, it can be said that it is possible to know the correct direction.

Features of 3C analysis

Next, let’s look at the characteristics of 3C analysis.

Framework for analyzing the environment

3C analysis is a framework that helps you analyze the industry environment surrounding your company. Rather than simply exploring your company’s potential and strengths, you can objectively analyze the external environment such as the surrounding market, customers, and competitors, as well as your company’s internal environment based on that.

Understand the three perspectives and their relationships

As explained above, 3C analysis is performed from the three perspectives of Customer, Competitor, and Company, and finally analyzes the relationship between each. In other words, the characteristics of 3C analysis can be said to be that it yields two elements: “three perspectives” and “relationships among the three positions.”

simple framework

One of the reasons why 3C analysis is so widespread is that it is a simple and straightforward framework. If the marketing department takes the lead in conducting 3C analysis, it may be necessary to collect information within the company, but 3C analysis will be easier to understand and be recognized within the company.

Mainly information gathering

Although 3C analysis is called “analysis,” some people think that it is primarily information gathering rather than analysis. When formulating a marketing strategy, it is common to use various other frameworks such as

SWOT analysis

and

PEST analysis

, but compared to other frameworks, 3C analysis may be said to be about information gathering. I don’t know.

Meaning and analysis items of 3C

Now, let’s take a closer look at what to analyze for each of the 3Cs.

1.What is a Customer?

In Japanese, the word “customer” has the image of “customer” or “customer”, but in 3C analysis, we consider the market as well. In other words, Customer is a “market/customer” analysis, and mainly collects and analyzes information on the following items.

2.What is a Competitor?

Competitor refers to a competitor. A company’s competitors are its competitors. If there are too many competitors, narrow down your analysis to the companies you want to analyze. In most cases, you will choose a representative company with a large market share or a company that competes with your company or its products or services.

First, we analyze the market share of each competitor, and then collect and analyze information about each competitor using the following items.

3.What is a company?

Finally, we will analyze the Company based on the Customer in 1 and the Competitor in 2. Company refers to your own company. We collect information about your company’s internal environment using the following items.

How to do 3C analysis

Next, let’s finally check how to perform 3C analysis.

1.How to do customer analysis

Customer analysis can be broadly divided into two aspects: market and customer.

Market Analysis To understand a market or industry, it is common to perform macro and micro analysis.

From a macro analysis perspective, a framework called “PEST analysis” is often used to understand social changes such as the economy, legal reforms, population, and trends. PEST is an acronym for the four words “Politics, Economy, Society, and Technology” and allows you to understand the external environment.

Micro analysis involves narrowing down the industry and analyzing how that specific industry impacts your company. A framework called “5 Forces Analysis” is often used for microanalysis.

Five forces analysis analyzes five factors in a specific industry: “bargaining power of sellers,” “bargaining power of buyers,” “hostile relationships among competitors in the industry,” “threat of new entrants,” and “threat of substitute products.” This will give you an idea of ​​the profitability in that industry. The higher the strength of these five factors, the less profitable and attractive the industry is.

Customer AnalysisNext is customer analysis. You may have obtained a variety of information through macro and micro analysis of market analysis, but let’s analyze how much this information influences customer needs and values.

For customer analysis, methods such as questionnaire surveys are often used. In addition to conducting surveys directly with customers, one method is to ask the operators who handle inquiries about frequently asked questions from customers.

2. How to do Competitor analysis

Competitor analysis collects and analyzes information on competing companies based on the items mentioned above.

Earlier, we divided the information into two categories: “About competitors in the market” and “About each competitor.” What you want to know from this information is what trends your competitors are doing in the market. The purpose is to find out what strategies they have and how they behave.

Also, the fact that the company is listed as a competitor means that it has achieved some kind of success, such as increasing sales in that market. Therefore, analyzing “how results were achieved?” can be useful in formulating your company’s strategy.

Competitor information is not so publicly available, but try to gather as much information as possible.

3.How to conduct company analysis

Then, based on the results of customer analysis (1) and competitor analysis (2), we conduct an analysis from the perspective of how these external environments affect the company’s internal environment and how to develop strategies. Simply put, we think about how our company can devise a strategy to achieve results in the context of the market, customers, and competition surrounding our company.

To do this, we must dig deeper into our company. In addition, companies decide on their own strategies after knowing what strategies their competitors are using to succeed in relation to market and customer conditions.

Company analysis often uses the VRIO analysis and SWOT analysis frameworks.

VRIO analysis


VRIO analysis’s VRIO is an acronym for the four words: “Value (economic value),” “Rareness,” “Imitability,” and “Organization.” VRIO analysis will analyze these four elements. Focus on your company’s management resources and analyze your internal environment to secure a competitive advantage over competitors in the market.

Let’s check the meaning of each element.

By performing VRIO analysis, you can understand the strengths and weaknesses of your company’s management resources, which can lead to optimization.

SWOT analysis


SWOT analysis is also often used. 3C analysis analyzes the external environment such as Competitor and Customer, and the internal environment such as Company. Taking into account the external environment and internal environment, it is possible to determine what challenges exist and what solutions to those challenges. “SWOT analysis” allows you to think about whether there is a

SWOT is an acronym for the four acronyms: “Strength,” “Weakness,” “Opportunity,” and “Threat.” SWOT is an acronym that analyzes both the external and internal environments. This allows you to think specifically about your company’s strategy by crossing the two.

Once you have identified these four elements, you can combine them to come up with a strategy as follows.

“Strengths x Opportunities” What are the ways to leverage strengths and win opportunities?

“Strengths x Threats” How can we overcome threats by leveraging our strengths?

“Weakness x Opportunity” What are the ways to strengthen weaknesses and maximize opportunities?

“Weakness x Threat” How can we minimize the impact of threats based on our weaknesses?

The following article explains SWOT analysis in detail, so please refer to it.

Practical example of 3C analysis

Now, to give you an idea of ​​how to actually perform a 3C analysis, I would like to introduce a specific example.

Let’s look at an example of 3C analysis using a hypothetical case in which an apparel shop specializing in suits conducted 3C analysis when formulating a marketing strategy for entering online sales. There may be fewer items or less specific figures compared to the actual situation, but please treat this as an example only.

1.Customer analysis

2.Competitor analysis

3.Company analysis

• Our company’s corporate philosophy is “Delivering excitement to all customers.” In accordance with our corporate philosophy, we not only provide products through online sales, but also thoroughly provide impressive services.

1. ・Currently, sales at stores are yen and market share is around 35%

• In terms of its own resources, assets, equipment, etc., it is inferior to the major companies A and B. -In terms of PR, it uses online advertising. ・We regularly hold seminars to impart know-how on choosing suits, so customers can use these resources as column articles in our online shop. It also leads to differentiation from other companies.

In this way, we will summarize the information collected for each of the 3Cs. This will help you see what specific strategies you need to create to achieve results.

Key points for successful 3C analysis

So far, we have explained the outline and method of 3C analysis, but there are some points to keep in mind in order to make 3C analysis successful. I would like to introduce the main points.

collect a lot of correct information

I mentioned that 3C analysis is primarily about information gathering as a framework feature. The key to collecting that information is to collect as much correct information as possible. Currently, most information can be collected on the Internet, but by collecting accurate information using various methods such as purchasing data or conducting customer surveys, highly accurate 3C analysis can be performed. .

Information about your company is the easiest to gather by making full use of your internal connections, but as the company grows, the accuracy and amount of information will change depending on who you ask. One idea is for a marketing person who conducts 3C analysis to directly interview all departments and divisions. This is because important information may be obtained. For this reason, it is important to build internal networks on a daily basis.

You can also obtain information about your company from partner companies. If information can be obtained more objectively, the accuracy of 3C analysis will improve.

Proactively collect information that is negative for your company You may ordinarily hide information that is inconvenient for your company. There is also a tendency to focus only on the success factors. However, since 3C analysis collects information only for internal strategy planning, it is important to actively collect information that is negative for your company. The more information you have, the easier it is to avoid risks and develop strategies for success.

Eliminate your company’s wishful thinking When analyzing your company and competitors, you must eliminate as much as possible the wishful thinking that is convenient for your company. For example, suppose you are currently at a disadvantage. Even if you think you will be ahead in the near future, you should not be overconfident and focus only on the fact that you are currently at a disadvantage. Otherwise, correct analysis cannot be performed.

When conducting a competitive analysis, it is difficult to obtain a wide range of information, especially about competing companies, so the analysis will be based on limited information. What I want to be careful about is not making decisions based on a narrow field of view. For example, if there is a company that is successful in e-commerce, if you focus only on its success in e-commerce and overlook the low sales and awareness of other products and stores, you will not be able to accurately evaluate its competitors. I can’t figure it out. Try to see the bigger picture.

In the case of BtoB business, also perform a 3C analysis of the customer.If your company is engaged in

BtoB

business, the customer is a company, so it is also effective to perform a 3C analysis of the customer company. This allows us to develop marketing strategies to increase sales and acquire potential customers for our client companies. You will be able to make proposals that will please your client companies.

By keeping these points in mind when performing 3C analysis, you can obtain more accurate results. Let’s use it together with other frameworks to create meaningful marketing strategies.

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