The strategic triangle (Ohmae)

Kenichi Ohmae’s strategic triangle explains strategy as a dynamic fit between the company, its customers and its competitors. The quality of thinking matters more than the volume of planning documents.

When to use it

• Use the triangle to create or pressure-test an emerging strategy, especially when a plan reflects the company’s preferences but has not yet reconciled customer value with likely competitor response. It is also useful when growth has stalled and the team needs to locate which side of the strategic fit has weakened.

Origins

Ohmae developed the approach in The Mind of the Strategist, published in Japan in 1975 and in the West in 1982. Drawing on Japanese corporate practice and his experience leading McKinsey in Japan, he argued that strategy should improve a company’s relative strength efficiently rather than merely extend an internal plan.

What it is

The 1975 and 1982 editions challenged rigid, short-term planning. Japanese manufacturers were prepared to invest for 10 or 15 years before earning adequate returns in a new market, while continually adapting the route to a long-term objective.

Ohmae opposed tunnel vision and perfectionism. A strategist should keep alternative paths open and accept a partial advantage that can be compounded rather than wait for an unattainable perfect solution.

He describes four routes to advantage:

• Reallocate resources: identify the most critical key success factors and strengthen the capabilities that drive them.
• Focus on relative strengths: invest where the company already performs distinctively against competitors.
• Make a bold stroke: redefine the basis of competition through a creative or aggressive move, as just-in-time production changed inventory economics.
• Use strategic freedom: innovate in dimensions competitors have neglected, echoing later blue-ocean thinking.

Company, customer and competition form the strategic triangle, also called the 3Cs.

The strategic triangle (or the 3Cs)

Company

Competition Customers

How to use it

Start with customers: which segments and needs are important, how are they changing and what value do they recognise? Then assess the company: which resources and competences can serve those needs distinctively, and which average activities could be partnered or outsourced? Finally, analyse competitors: where are they strong, how might they respond and where does room for a different position remain?

Reconcile the three views into a small set of choices. Concentrate on customer subsets rather than an undifferentiated market, build the few capabilities that matter and compete where the company can create or sustain an edge.

Treat the triangle as dynamic. A change in customer preference, company capability or competitor behaviour can shift the other sides. Revisit assumptions frequently and keep asking why the current way of operating is necessary.

Top practical tip

Build the strategy from a simultaneous view of customer need, company capability and competitor response, then revisit the fit as any side changes.

Top pitfall

Do not turn lessons from a particular era of Japanese industry into universal cultural stereotypes or a fixed recipe for every market.

Further reading

• Ohmae, K. (nineteen eighty-two). The Mind of the Strategist. McGraw-Hill.
• Ohmae, K. (nineteen eighty-eight). “Getting Back to Strategy.” Harvard Business Review.