Previous article
Next article

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 elementsCustomerCompetitionCost, 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 on external market conditions, the last 2 provide internal information about the company. The framework belongs to the basic tools, which serve as a 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 the 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 the company's capabilities:

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

Key takeaways for the 4C Framework

  • 4 elements of interest: CustomerCompetitionCost, and Capabilities.
  • Customer and Competition provide an external view.
  • Cost and Capabilities provide an internal view.
  • Useful for market analysismarket entry, and introduction of a new product.
Previous article
Next article
Do you have questions on this article?
Contribute to our Q&A forum and ask the community your question!

Related Cases

Expert case by Francesco
Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US.The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadv ... Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US.The mission of SmartBridge is to help as many stude ... (Open whole case)
31.4k
Times solved
4.6
600+ Ratings
Advanced
Difficulty
Expert case by Ian
[PLEASE NOTE: This is a technically difficult case and should only be completed by those coming in as a Technology specialist, i.e. recruiting for McKinsey Digital, BCG Platinion, etc.]Our client is a multinational oil and gas company. While they are vertically integrated and have upstream, midstrea ... [PLEASE NOTE: This is a technically difficult case and should only be completed by those coming in as a Technology specialist, i.e. recruiting for McKinsey Digital, BCG Platinion, etc.]Our c ... (Open whole case)
13.7k
Times solved
4.4
< 100 Ratings
Advanced
Difficulty
Expert case by Francesco
Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client? Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client? (Open whole case)
13.5k
Times solved
4.1
100+ Ratings
Intermediate
Difficulty
Expert case by Ian
Problem definition: Our client is Korean Car Parts (KCP), a multi-national original equipment manufacturer (OEM) of car parts based in Korea. They've recently seen a decline in profits and have brought us in to understand how to address this falling profitability.========================== ... Problem definition: Our client is Korean Car Parts (KCP), a multi-national original equipment manufacturer (OEM) of car parts based in Korea. They've recently seen a decline in pro ... (Open whole case)
11.2k
Times solved
4.6
300+ Ratings
Intermediate
Difficulty
Expert case by Ian
Our client is Yoda's Phones, a national telecommunications company. They have embarked on a three-year, multi-million dollar digitization program. Unfortunately, two years into the program, they realize they are significantly behind schedule and over budget.You have been brought in to right the ship ... Our client is Yoda's Phones, a national telecommunications company. They have embarked on a three-year, multi-million dollar digitization program. Unfortunately, two years into the program, ... (Open whole case)
9.6k
Times solved
4.5
< 100 Ratings
Intermediate
Difficulty
How likely are you to recommend us to a friend or fellow student?
0
1
2
3
4
5
6
7
8
9
10
0 = Not likely
10 = Very likely