JP Castlin wrote a blog post titled 3s and Cs: Introducing Kenichi Ohmae.

« Ohmae’s argument—first introduced in Mind of the Strategist [originally published in 1982]—centers around the idea that the only way to achieve a competitive advantage is by balancing three elements in a strategic triangle: the corporation, the customer, and the competitor. »

« a corporation-led strategy is chiefly concerned with building robustness by focusing on what the organization does best and maximizing its strengths. No company will be able to lead in every category, so it makes apparent sense to attempt to gain an edge in a specific key function… Anything not considered essential, whether in terms of strategic functions or pure operations, can be outsourced in the name of cost reduction.»

« The focus on costs is consistent throughout Ohmae’s argument, which is perhaps not entirely surprising given the time in which he originally formulated it. Corporations are said to perform best when a), reducing basic costs more effectively than the competition, b) exercising higher selectivity in terms of what orders to accept and solutions to offer (thereby cutting unnecessary functions and dropping functional costs faster than sales revenue), or c) combining certain key functions within the corporate umbrella, thereby sharing overhead costs.»

« a customer-based strategy is an expression of market orientation and rooted in segmentation and targeting; identify a market subset and satisfy its need. This should primarily be done on customer objective (what many of us today would call category entry points), market coverage (cost vs reach) or user mix, and continuously updated.»

« the competitor-focused strategy is one of differentiation; purchasing, design, engineering, sales, pricing and servicing are all considered sources thereof. In other words, differentiation can be both perceived (e.g., via brand-building advertising) and functional (e.g., fixed cost ratios).»

[There was discussion about differentiation on Twitter. Everard Hunder pointed out a couple of tweets from Byron Sharp, author of How Brands Grow: “Don’t get me wrong. Differentiation (when it’s a real consumer benefit) can also be great. But people who think Distinctiveness and Differentiation are the same thing are muddled… Because differentiating can be dangerous, even suicide. Whereas being distinctive (branded) is highly advantageous.”]

« strategic planning, in his view, must be broad, comprehensive and allow for adaptation. This means that resilience very much remains a part of the overall corporate conversation, and that looking for the perfect strategy or the perfect competitive situation is an exercise in futility. »

One flaw: « Ohmae’s engineering background, for example, means that his views on strategy are explicitly [reductionist]; analysis is considered a ‘cognitive process of breaking a complex topic into smaller parts to gain a better understanding of it’. As we know, attempting to separate parts and find root causes in complex adaptive systems in order to better grasp emergent patterns is a fool’s errand. »

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s