Strategic Thinking for Competitive Advantage
Automation has evolved rapidly, from its early stages to AI, Generative AI (GenAI), and now Agentic AI. Adopting these innovations is becoming more competitive than ever before. While some companies rise, others struggle to keep pace. As technology advances, business landscapes shift. Markets expand globally, and products that once carried a premium price tag become accessible to a broader audience. In this relentless environment, business leaders must continuously innovate to maintain their competitive edge. The truth is, competition never fades—it only evolves. To sustain and grow, we must adapt, refine, and rethink our strategies. Strategic thinking and execution become important in winning and navigating the competition.
This blog explores powerful strategic models developed by some of the world’s leading thinkers. These frameworks offer perspectives and actionable insights that help leaders navigate competitive markets and make better decisions under pressure. Strategic thinking is hard, but we can adapt and change as we go. In this blog, I discuss two strategic thinkers’ models. Their ideas have shaped my own strategic thinking, and I believe they can do the same for you. In this blog, I write about Kenichi Ohmae, W. Chan Kim & Renee Mauborgne, and their models.
These frameworks offer proven strategies for navigating competitive landscapes. Whether through Ohmae’s 3C model or Kim & Mauborgne’s path-breaking market creation model, business leaders can find inspiration to shape their organizations’ futures.
About Strategic thinkers
Kenichi Ohmae—The 3C Model
Kenichi Ohmae, a renowned strategist, introduced the 3C Model, which highlights the interplay between three critical elements: Customer, Company, and Competition. His insights emphasize that success lies in balancing these factors rather than focusing solely on one.
📖 Notable works and influences:
- Ohmae has authored several influential books, including The Mind of the Strategist, The Borderless World, and The End of the Nation-State. These works have shaped the thinking of business leaders worldwide.
- As a former McKinsey & Company consultant, he advised major corporations on high-stakes strategic decisions.
- As the founder and managing director of Ohmae & Associates, he has published over 190 books, continually influencing business strategy.
Chan Kim & Renée Mauborgne—Blue Ocean Strategy
Chan Kim and Renée Mauborgne revolutionized competitive strategy with their Blue Ocean Strategy framework. Instead of battling rivals in crowded markets (Red Oceans), they urge businesses to create entirely new demand spaces (Blue Oceans), making competition irrelevant.
📖 Notable works and influences:
- Professors of Strategy at INSEAD, one of the world’s leading business schools. They are co-directors of the INSEAD Blue Ocean Strategy Institute, which drives research on market-creating innovations.
- Their book Blue Ocean Strategy has sold over 4 million copies and is widely regarded as a strategic masterpiece.
- In their latest book, Beyond Disruption, they expand their ideas by emphasizing value creation without destructive industry shifts. This concept deeply resonates with me, as it redefines the way businesses can innovate sustainably.
(1) Kenichi Ohmae’s 3C Model: Customer, Company, Competition
Kenichi Ohmae, a Japanese business strategist, placed the customer at the heart of his framework. His 3C model emphasizes three core elements
Customer: Ohmae’s focus on customers aligns with Japan’s deep-rooted culture of customer-centricity. Understanding customer needs defines the market segment we serve, the value we offer, and the satisfaction we deliver. In a competitive landscape, pushing our solutions without addressing customer pain points is a losing strategy. Success comes from aligning our offerings with real customer needs. While delivering customer satisfaction,
Company: Building competencies is an ongoing process. While we recognize the need to understand our strengths, companies often misstep by venturing into areas where they lack expertise. Strategic growth requires investing in core strengths, differentiating through innovation, and acquiring new technologies that reinforce existing competencies. A company that continuously enhances its capabilities stays ahead of the competition.
Competition: While we focus on strengthening our business, competitors constantly introduce new methods and products. Staying ahead requires anticipating their moves, which demands a blend of analysis and intuitive intelligence. Competitive awareness is not just about reacting but also proactively shaping strategies that keep us in the lead.
The Interplay Between the 3Cs : A successful strategy integrates all three elements—customer, company, and competition—into a cohesive approach.
Amazon: A Case Study in the 3C Model:
Amazon exemplifies this model through its relentless focus on customers, operational strengths, and strategic competition.
Customer Focus: The company’s obsession with delivering an outstanding user experience has resulted in innovations like one-click ordering, personalized recommendations, and voice-activated shopping via Alexa. Prime delivery has overhauled logistics, delivering most products in one day or less.
Company Strengths: Advanced digital infrastructure and a world-class supply chain form the foundation of Amazon’s operational backbone. By leveraging cloud computing (AWS), robotics in warehouses, and AI-driven inventory management, it minimizes costs while maximizing efficiency. The company reinvests its profits into research and development, ensuring continuous innovation.
Competitive Edge: Amazon doesn’t just follow trends; it sets them. It has made aggressive moves in AI, automation, and predictive analytics to optimize everything from pricing to delivery logistics. This strategic investment has fueled its dominance, contributing to a staggering net profit of $30 billion in 2023. Acquisitions such as Whole Foods and MGM Studios, along with expansion into high-growth markets like healthcare and fintech, further strengthen its competitive advantage.
Applying the 3C model to IT services
The 3C model—Customer, Company, and Competition—applies just as effectively to IT services as it does to product-based businesses. Companies that invest in innovation labs, employee training, and upskilling programs position themselves for long-term success. However, many firms succumb to the pressure of cost-cutting, making short-term decisions that ultimately weaken their R&D investments and competitive edge.
Customer: Delivering Beyond Expectations:
In IT services, client satisfaction hinges on timely delivery, quality assurance, and proactive innovation. Customers expect service providers to not only meet their needs but also anticipate future challenges.
A healthcare technology client developing life-critical systems for surgeries or creating an instrument cluster in a passenger car requires flawless software performance. A minor defect could result in life-threatening consequences. Ensuring quality and its evidence is the key challenge. When the company is able to meet the quality aspects at optimal cost and ensure quality and on time (QCD—Quality, Cost, and Delivery), it moves beyond the expectations.
Company: Strengthening Core Competencies:
To achieve the above, the company may need to invest in innovation labs and emerging technologies, such as AI, blockchain, and GenAI. It also requires investment in upskilling and reskilling of employees.
Competition: Staying Ahead Without Cutting Critical Investments
Developing automated tools is a common strategy in today’s competitive landscape. But how can we create an integrated approach that connects market requirements to product QA using automation? This is especially critical when products must comply with strict quality standards, such as FDA regulations for medical devices or ISO 26262 and ISO 21448 standards in the automotive sector.
When a company automates the entire domain-specific lifecycle, it gains a significant advantage over competitors who lack similar solutions. In doing so, the service provider elevates itself to a solution provider rather than just a low-cost service provider. However, this transformation requires an initial investment, which may result in short-term losses. If the company believes automation will become a key differentiator, then strategically implementing it across various touchpoints can provide a lasting competitive edge.
Strategic models may sometimes seem straightforward, but their true complexity emerges during implementation. Challenges often surface that were not initially apparent. This is why applying strategic thinking in the right context, anticipating future impact, and taking decisive action now is crucial for staying ahead of the competition.
(2) Blue Ocean Strategy: Creating Uncontested Market Space
In the fast-evolving IT services industry, traditional competition revolves around pricing, resource availability, and delivery speed. Companies engage in bidding wars, chasing market share—yet margins shrink, and differentiation becomes increasingly difficult.
But what if IT service providers stopped competing and started creating? This is where Blue Ocean Strategy, introduced by W. Chan Kim and Renée Mauborgne, becomes a game-changer. Instead of fighting for clients in crowded IT markets (Red Oceans), companies can create uncontested spaces (Blue Oceans)—delivering unique, high-value solutions where competition is irrelevant.
Key Elements of Blue Ocean Strategy
Value innovation: moving beyond cost and scale
Some IT services firms compete on cost efficiency and workforce scale, but Blue Ocean Strategy challenges this approach by focusing on value innovation—delivering IT solutions that simultaneously increase customer value and reduce service delivery costs. Instead of competing on cost and headcount, focus on client-centric innovation that eliminates friction and enhances value.
The Eliminate-Reduce-Raise-Create (ERRC) Grid
To escape the commodity trap, IT services firms must rethink their business model using the ERRC framework:
Eliminate services that have become outdated or low-value.
Reduce overinvestment in legacy processes or non-differentiating offerings.
Raise: High-value capabilities like automation, AI, and consulting-led solutions.
Create new service models that transform how clients consume services.
The Three Tiers of Non-Customers
Instead of competing for existing IT budgets, Blue Ocean Strategy urges firms to target new, untapped customers:
- First Tier: Customers who use IT services but are dissatisfied with outdated engagement models.
- Second Tier: Enterprises that avoid outsourcing due to complexity or security concerns.
- Third Tier: Organizations that never considered IT services but can benefit from industry-specific tech solutions.
Summary:
For IT services companies looking to escape Red Ocean competition, the ERRC model applies, as below. However, this is a continuous process.
Determine the areas in your industry where price wars are prevalent—what steps can you take to break free?
- Find new client segments—Are there non-traditional buyers (e.g., automotive, healthcare, pharma) that IT firms often ignore?
- Leverage AI & automation—Can your firm create an entirely new service model?
- Create differentiated services—How can you package industry-specific solutions that make competition irrelevant?
While many of us are trying to use generative AI for improving productivity, this company (Mouthwatering taste, texture, and appearance—Motif) has ventured into an uncontested market (plant-based meat: how AI is driving its evolution). As the demand for protein consumption increases, the sustainability challenges also increase. This is an example of adopting GenAI in an uncontested market.
(3) Beyond Disruption
For years, “disruption” has been the dominant paradigm in innovation. Think of companies like Uber or Netflix that revolutionized existing industries, often displacing established players. While disruption is powerful, Kim and Mauborgne argue that it’s not the only way to innovate and grow.
Their concept of “nondisruptive creation” focuses on creating entirely new markets, rather than disrupting existing ones. It’s about finding untapped needs and offering solutions that didn’t exist before, thereby expanding the overall market and generating new growth without necessarily destroying existing jobs or businesses. The following are the key ideas of non-disruptive creation.
- Focus on “Noncustomers”: Identify people who aren’t currently using existing products or services. What are their unmet needs? What are the barriers preventing them from participating in the market?
- Value Innovation: Offer a significant leap in value for both the company and its new customers. This often involves simplifying complex products or services, making them more accessible and affordable.
- Creating New Demand: Nondisruptive creation isn’t about taking market share from competitors. It involves generating new demand where none previously existed.
- Positive-Sum Growth: Unlike disruption, which can be a zero-sum game, nondisruptive creation aims for a win-win scenario where both businesses and society benefit. This is the differentiator in the model. In a disruptive market, there is a win for someone but a loss for others. For example, because of Amazon, it is estimated that the offset between losing jobs and new jobs created does not match. The same is the case with Uber; many conventional cab companies went out of business. But in the case of non-disruptive creation, it does not impact the existing business; it creates something in addition to it.
Example in IT services: Digital Twin
- Digital twins create a virtual model of real-world assets, allowing organizations to optimize performance without interrupting ongoing operations.
- Example: Instead of shutting down a factory to test new processes, manufacturers can simulate changes in the digital twin before applying them in reality.
- Non-Disruptive Creation:
- Organizations can plan gradually and intelligently, avoiding costly disruptions.
- Businesses improve efficiency and innovation without abandoning existing investments.
- Instead of replacing human workers, digital twins empower them with real-time insights and automation assistance.
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- Organizations can innovate boldly but safely, minimizing risks and avoiding sudden disruptions.
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- Businesses evolve sustainably, reducing waste while embracing innovation.
Example: Low-Code/No-Code Platforms—Empowering “Citizen Developers”:
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- Bridging the Gap: Traditionally, software development required specialized coding skills, creating a barrier for many. Low-code/no-code platforms break down that barrier, allowing people with domain expertise (e.g., marketing, finance, HR) to build applications without needing to be programmers.
- Solving Their Own Problems: These “citizen developers” are often closest to the business challenges within their departments. They can use these platforms to create solutions tailored to their specific needs without relying on the often limited resources and long lead times of IT departments.
- This is addressing the new market without disrupting the existing market.
Final Thoughts: Strategy as an Ongoing Journey
Competition is relentless. No single strategy guarantees success forever. Business leaders must embrace continuous learning, adaptation, and innovation to thrive. Whether through Ohmae’s 3C model, Blue Ocean Strategy, Michael Porter’s five forces of competition, or D’Aveni’s hypercompetition framework, the key lies in proactive thinking and bold execution. Which strategy resonates most with your business? Are you navigating existing competition, creating a Blue Ocean, or battling in a hypercompetitive market?
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