5 C’s Analysis: What is it?
An organization’s environment can be analyzed through a 5 marketing C’s Analysis. As well as providing insight into the factors that drive success, it can also provide insight into risks.
5 C’s are.
It is crucial to identify the Sustainable Competitive Advantage of a company when analyzing it using the 5C marketing framework. The success of a company can be influenced by brand equity, economies of scale, technological advancements, etc.
An organization’s assets can be assessed using the VRIO (Variable Rare Imitable Organized) model to determine whether a competitive advantage is temporary or sustainable.
Companies collaborate with other companies to be able to offer their particular goods or services in the way they do. In addition to spot contracts and quasi-vertical integration, the supply chain is one of the primary contributors to this factor.
Using the 5C Analysis framework, downstream collaborators are more specifically defined as customers, so integration can only occur upstream.
The group of potential customers a company can reach with its products or services can be broken down into three main sizes: Total Available Market, Serviceable Available Market, and the Serviceable Obtainable Market.
Other factors can distinguish the market segments, such as demographics, psychographics, and geography.
TAM represents the entire customer base that can demand a given product or service.
TAM can be divided into Serviceable Available Markets (SAMs) based on a company’s products or services’ potential use. It is possible for a company to capture the Serviceable Obtainable Market (SOM) segment of a market by defining the market in its most narrow sense.
The focal company can compete with companies in the same industry. Providing industry classification systems, such as the North American Industry Classification System, standardizes the definition of industries.
The market share of players within the industry is a common metric for identifying players of interest. In general, the concentration ratio CR4 refers to the percentage of market share held by the four largest companies.
Certain companies, however, may not receive a sufficiently comprehensive industry definition from industry classification systems. It may be that a firm serves a niche market or operates across multiple industries.
PESTEL analysis is commonly used to analyze the environment in which a business operates. Essentially, it provides coverage for those areas in which businesses have limited or no control, but which may still have an impact on their business.
Companies may be impacted more by changes to contextual factors than by changes to specific companies. Due to this, the focal company may not experience a competitive advantage as a result of such changes.