5 C Analysis is a marketing framework to analyze the environment in which a company operates. 5 C Analysis is a technique used to conduct a situation analysis. Conducting a situation analysis is one of the important steps in identifying the research problem. A situation analysis involves examining the external environmental factors and internal organizational capabilities that impact how a company operates. They are used to analyze the five key areas that are involved in marketing decisions for a company and includes Company, Customers, Competitors, Collaborators, and Climate. The 5 C’s are a good guideline to make the right decisions, and construct a well-defined marketing plan and strategy.
Customers – Understanding customers is a key part of the situation analysis. It involves knowing the target audience, their behaviour, market size, market growth, buying patterns, average purchase size, the frequency of purchase, and preferred retail channels. Determine what are the needs and from which clients that you’re trying to satisfy. 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 Target Market. The market segments may be further segmented through demographics, psychographics, geography and other distinguishing factors.
Company – The company analysis studies an organization’s vision, strategies, capabilities, product line, technology, culture, and objectives. It is useful in understanding the existing and potential problems with the company’s business. Determine if your company is in a position to meet those customer needs. For example, whether your company has the right product line and technical expertise. A good tool to find out your company’s strengths and weaknesses is a “SWOT” analysis.
• Strengths: innovative products, expertise and procedures
• Weaknesses: lack of knowledgeable technical support or average product quality
• Opportunities: a new international market or a market led by a weak competitor
• Threats: a new competitor or price war
Competitors – Determine who competes with your company in meeting the customer’s needs. Is the competitor an active competitor or is it a potential threat? What are their products exactly? What are their strengths and weaknesses? Competitor analysis is critical to understanding the external environment in which the firm operates. This analysis involves knowing the competitors’ strengths, weaknesses, positioning, market share, and upcoming initiatives.
Collaborators – Collaborators are the external stakeholders who team up with the organization in a mutually beneficial partnership. Agencies, suppliers, distributors, and business partners are typical collaborators. It is important to understand their capabilities, performances, and issues to better identify business problems. Collaborators are entities that allow or enhance a company to provide its particular good or service in the way that it does.
Climate—Climate analysis is the evaluation of the macro-environmental factors affecting the business. PESTEL analysis can be used to analyze climate—political, economic, social/cultural, technological, environmental, and legal scenarios are included in PESTEL.
Political issues: legal problems, trade regulations, taxes or labour laws
• Economic issues: growth rate, labour costs, and business cycle stage
• Social impacts: demographics, education, and culture
• Technological developments: impact on cost structures
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