Author:LairdReedReviewers:ScottWells,KarenHellmichbc3C’sMarch1998Copyright©1998Bain&Company,Inc.2CU7112497ECABOSCopyright©1998Bain&Company,Inc.3C’s•The3C’sframework•Toolsandstrategicquestionsanswered•TakeawayslidesAgenda3CU7112497ECABOSCopyright©1998Bain&Company,Inc.3C’sAgenda•The3C’sframework•Toolsandstrategicquestionsanswered•Takeawayslides4CU7112497ECABOSCopyright©1998Bain&Company,Inc.3C'sStrategicPurpose:•Todetermineacompany’sstrategiccostpositionrelativetocompetitors•Toidentifycostreductionopportunities•Toidentifyrevenueandprofitmaximizingstrategies•Toachievedifferentiationandpreemptcompetitormoves•Todeterminethestrategiesthatfitbestwithacompany’scorecompetenciesCostsCustomersCompetitorsCapabilitiesThe3C’sisoneofthecoretoolsusedtodeterminethemostleveragedstrategyforabusiness.Thefourth,oftenneglected,“C”Framework5CU7112497ECABOSCopyright©1998Bain&Company,Inc.3C’sAgenda•The3C’sframework•Toolsandstrategicquestionsanswered•Takeawayslides6CU7112497ECABOSCopyright©1998Bain&Company,Inc.3C’sCostsCost-RelatedBainToolsStrategicQuestionsAnsweredCostsCustomersCompetitorsCapabilities1.RelativeCostPosition1.Howdoourcostscomparetocompetitors’costsbyproduct/service/business?Whatisourfullpotentialcostposition?2.ExperienceCurve2.Towhatextentisthecompanyusingitsaccumulatedexperiencetodrivedownunitcosts?3.CostSharingAnalysis3.Arethereanyopportunitiestosharecostswithinthecompany?Whatarethepotentialsavingsfromcostsharing?4.BestDemonstratedPractice4.Whatarethebestinternalandexternalpractices?Towhatextentaretheytransferable?Whatwillbetheimpactofimplementingthemmorebroadly?5.ValueChainAnalysis5.Howcanweoptimizeateachstepinthevaluechain?Whatarethecostdriversateachstep?6.ProfitHunt6.Whatarethequickhitoperatingimprovements?Whatisthesavingspotential?7.ProductLineProfitability/CostAllocation/ActivityBasedCosting7.Howdoweallocatecoststoeachbusiness/product/customersegment?8.OverheadAnalysis8.Isthecompany’soverheadanefficientuseofresources?9.Fixed/VariableAnalysis9.Whatisthefixed/variablesplitofthecompany’scosts?10.Direct/IndirectAnalysis10.Howmuchofthecompany’scostsaredirectly,vs.notdirectly,associatedwiththeproductionofaproduct?7CU7112497ECABOSCopyright©1998Bain&Company,Inc.3C’sCustomersCustomer-RelatedBainToolsStrategicQuestionsAnswered1.CustomerSegmentation1.Whataretheappropriatecustomersegments?Howcaneachsegmentbedescribed?2.PurchaseCriteriaRating(ImportanceAnalysis)2.Whatisimportanttoeachsegmentwhentheypurchaseaproductorservice?3.CompanyPositioning(EffectivenessAnalysis)3.Howwellpositionedisthecompanywitheachsegment?4.AttractivenessAnalysis4.Whichsegmentsaremostattractivefrombothafinancialandanimplementationperspective?–revenueopportunity–costtoserve–strategicfit5.ValuePropositionDevelopment5.Whatproduct/service/channelofferingwillmeetthetargetsegment’sneeds?8.CustomerRetentionandLoyalty8.Howcanweincreaseourretentionofourbestcustomers?HowmuchofanimpactwillincreasingretentionbyX%haveonourbottomline?9.CustomerAcquisition9.Howcanweacquireprofitablecustomers?CostsCustomersCompetitorsCapabilities6.PricingStrategy6.Whatpricewillmaximizelongtermprofits?7.DistributionChannelAnalysis7.Whataretheappropriatechannelsforeachproduct/service?Whataretheeconomicsofeachchannel?8CU7112497ECABOSCopyright©1998Bain&Company,Inc.3C’sCompetitorsCompetitor-RelatedBainTool...
