Create an account and get free access to 50+ articles.
Sign up for free >>
BootCamp Articles

Articles read: 0/52

The 4C Framework is a good framework to structure a firm's positioning

Get a broad overview of a business unit and its market with the 4C Framework

The 4C Framework is composed of four elements: Customer, Competition, Cost and Capabilities. The structure is useful to get a better understanding of the client and important during your case interview. While the former 2 provide information of external market conditions, the last 2 provide internal information about the company. The framework belongs to the basic tools, which serve as general roadmap and reminder of the major aspects to cover. The 3C Framework – Customer, Competition and Company is very similar except that the internal aspects of cost and capabilities are combined within the company.

Think about the 4 Cs when the case is about analyzing a market, entering a new market or introducing a new product

Within the first segment, the focus lies on the customer of the company

It is important to realize that the customer of the firm is not necessarily the end customer who buys the product. To find out more about the customer, questions should concentrate on:

  • Market size in terms of revenue
  • Growth
  • Segmentation by geography, products and/or other segments
  • Customer segmentation and types of customers
  • Attractiveness in terms of revenue and expected growth
  • Special needs and wishes
  • Loyalty
  • Distribution channels

The second part of the analysis should focus on the competition

It is important to understand the market position of the competitors as well as how the competition differentiates itself from the client's company.

  • Competitive position portrayed through the share and relative share of the market
  • Growth of the last years and expected growth
  • Fragmentation
  • Performance, for example profitability, relatively to ours
  • Dynamics of new entrants
  • Other trends

Moving to the third dimension - costs - the view changes from an external to an internal view

Here, we compare our client’s cost structure with the competition’s cost structure and try to reduce our costs if certain components of competition costs are lower.

  • Relative cost position, cost advantage compared to competition
  • Profitability by customers, product lines, geography
  • Economies of scale
  • Introduction of best practices
  • Exiting unprofitable areas
  • Reorganization of business units

The fourth and last area deals with capabilities

If we have a better understanding of the resources of a company, we are able to judge more precisely what kind of strategies a company can apply to boost its performance. Furthermore, we can decide if a company should rather make something by itself (organic) or buy the competencies from outside (inorganic - e.g., buying a new firm). Following are some examples of company's capabilities:

  • Core competencies
  • Human Resources
  • Technology
  • Value for the customers
  • Financial resources

Read a case using the Customer, Competition, Cost and Capabilities Framework.

Key takeaways for the 4C Framework

  • 4 elements of interest: Customer, Competition, Cost and Capabilities.
  • Customer and Competition provide an external view.
  • Cost and Capabilities provide an internal view.
  • Useful for market analysis, market entry and introduction of a new product.

Do you have questions on this lesson? Pose it to our community!

Ask a question
Related case(s)

Bain case: Asian lubricants producer

Solved 107.7k times
4.7 5 27661
| Rating: (4.7 / 5.0)

LubricantsCo, a very successful Asian premium producer of lubricants in their native region, would like to further increase their revenue and profit. The product range ranges from lubricants in the automotive sector (e.g. motor and gear oil) to industrial applications (e.g. fats, heavy-duty oils). ... Open whole case

Roland Berger case: Light on!

Solved 56.3k times
4.6 5 13868
| Rating: (4.6 / 5.0)

LumCO, a company producing injection-molded components for lighting applications, has operated successfully in its native European market. The company wants to open up one production facility each in China and the United States and establish their own distribution network in both countries to serve ... Open whole case

TKMC Case: Elevators

Solved 13.4k times
4.2 5 1173
| Rating: (4.2 / 5.0)

Your customer is the market leader in the North American elevator service business. This is divided into the areas of elevator construction, elevator modernization and service. The customer has a particularly strong branch network in medium-sized cities and would now like to expand its business in ... Open whole case

Our client Pharma Finance just finalized its first investment round and received $ 40m to invest in the build-up of a pharmaceutical manufacturing company. The CEO is mainly interested in high margins and profitable markets, with a sustainable and green production. This is why he wants you to find o ... Open whole case


Solved 55.6k times
4.5 5 1733
| Rating: (4.5 / 5.0) |

Nutripremium is a very well-known premium nutrition food company in Europe (€1 billion revenue last year). It is based in Spain and has an excellent market share not only in its home country but also in Portugal, France, Italy and Germany. Nutripremium has two main lines of products: Vitamin-su ... Open whole case