5C Analysis (2024)

A marketing framework for analyzing a company's operating environment

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What is the 5C Analysis?

5C Analysis is a marketing framework to analyze the environment in which a company operates. It can provide insight into the key drivers of success, as well as the risk exposure to various environmental factors. The 5Cs are Company, Collaborators, Customers, Competitors, and Context.

Company

When analyzing a company using the 5C marketing framework, the key issue is to identify the Sustainable Competitive Advantage that belongs to the focal company. It can be in the form of brand equity, economies of scale, technological development, etc. To identify if the focal company has a sustainable competitive advantage, the VRIO (Variable Rare Imitable Organized) model can be utilized to distinguish if a company’s assets offer a temporary or sustainable advantage.

5C Analysis (1)

Collaborators

Collaborators are entities that allow or enhance a company’s ability to provide its particular good or service in the way that it does. This factor primarily revolves around a company’s supply chain, that ranges from spot contracts up to quasi-vertical integration. The direction of integration can only be upstream, as downstream collaborators are more specifically defined as customers in the 5C Analysis framework.

Customers

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. The market segments may be further segmented through demographics, psychographics, geography, and other distinguishing factors.

The Total Available Market (TAM) is the most generalized customer segment that includes every possible customer that demands a particular product or service. The Serviceable Available Market (SAM) would be a subset of the TAM that is categorized by the potential use of a company’s product or service. The Serviceable Obtainable Market (SOM) sub-segment of the market is the narrowest definition that specifies the segment of a market that a company could realistically aim to capture.

5C Analysis (2)

Competitors

Competition can be found in the form of other companies operating in the same industry as the focal company. To determine the industry, industry classification systems such as the North American Industry Classification System exist to provide a standardized method of defining an industry.

One common metric to identify players of interest is to examine their market share within the industry. It is typically stated through the concentration ratio CR4, which shows the percentage of the market share held by the four largest firms in the industry.

Note, however, that industry classification systems may not provide a sufficiently thorough industry definition for certain companies. This can occur because a firm may operate across multiple industries or it may serve a niche market that differs from the traditional industry definition.

Context

The context in which a business operates is most often analyzed with the use of PESTEL analysis. It provides coverage into the areas that may affect a business, but where the business exercises either no or limited control. Changes to contextual factors may impact the industry as a whole rather than a particular company. As such, an advantage experienced by such changes may not translate into a competitive advantage for the focal company or vice versa.

5C Analysis (3)

Related Reading

Thank you for reading this guide to performing 5C Analysis. To help you keep learning and advancing your career, check out the additional CFI resources below:

5C Analysis (2024)

FAQs

5C Analysis? ›

What is the 5C Analysis? 5C Analysis is a marketing framework to analyze the environment in which a company operates. It can provide insight into the key drivers of success, as well as the risk exposure to various environmental factors. The 5Cs are Company, Collaborators, Customers, Competitors, and Context.

What is the 5 C's analysis? ›

5c analysis is used by companies to help them evaluate and understand potential challenges they may have to face in the future. By completing the process, you'll be able to identify which areas of your business are working well and areas for improvement before acting on these pros and cons.

What is difference between 5C and SWOT analysis? ›

Well, 5C's analysis is somewhat similar to SWOT Analysis, however, it is used as a framework for marketing, rather than evaluating the company's overall health and current standing. Understanding this type of situational analysis establishes marketing strategies that put businesses ahead of market competition.

What are the 5Cs? ›

The five Cs of credit are important because lenders use these factors to determine whether to approve you for a financial product. Lenders also use these five Cs—character, capacity, capital, collateral, and conditions—to set your loan rates and loan terms.

What is the 5C environmental analysis? ›

Examines five key areas: Company, Customers, Competitors, Collaborators, and Climate. It serves as a roadmap that illuminates the critical factors impacting an organization, offering insights that can be harnessed to drive growth and profitability.

What is the purpose of the 5 C's? ›

The five C's, or characteristics, of credit — character, capacity, capital, conditions and collateral — are a framework used by many lenders to evaluate potential small-business borrowers.

What are the 5 C's content? ›

To excel in content marketing, one must understand the 5 C's: Clarity, Conciseness, Compelling, Credible, and Call to Action.

How to do 5C analysis with example? ›

Template: How to Conduct a 5C Marketing Analysis
  1. What does my company sell? ...
  2. Do our products vary from competitors' products? ...
  3. What competitive advantage does my company have?
  4. What makes my brand unique or memorable?
  5. What does my business do better than others?
  6. What does my business do worse than others?
Jan 13, 2021

What are the 5 C's of strategy? ›

The 5 C's of marketing consist of five aspects that are important to analyze for a business. The 5 C's are company, customers, competitors, collaborators, and climate.

What is SWOT analysis called now? ›

SWOT analysis (or SWOT matrix) is a strategic planning and strategic management technique used to help a person or organization identify Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning. It is sometimes called situational assessment or situational analysis.

What are the benefits of 5C analysis? ›

By doing 5C Analysis, marketers can discover their competitive advantage—their target audience's needs and expectations. It also helps the marketers determine the challenges and risks, what competitive advantages your competitors offer, potential collaborations, and your adaptability to changes.

What are the disadvantages of 5Cs analysis? ›

One of the drawbacks of a 5Cs analysis is that it's not a decision-making tool. You get observations and facts; the goal is to draw initial business implications, and from there choose another approach in order to formulate a strategic recommendation.

Is 5C analysis internal or external? ›

Similar to the SWOT analysis, 5C analysis helps a business identify the internal and external factors that present either an opportunity or a threat.

How to do 5C analysis with an example? ›

Template: How to Conduct a 5C Marketing Analysis
  1. What does my company sell? ...
  2. Do our products vary from competitors' products? ...
  3. What competitive advantage does my company have?
  4. What makes my brand unique or memorable?
  5. What does my business do better than others?
  6. What does my business do worse than others?
Jan 13, 2021

What are the 5 C's of quality service? ›

Compensation, Culture, Communication, Compassion, Care.

What are the 5 C's in education? ›

That's why we've identified the Five C's of Critical Thinking, Creativity, Communication, Collaboration and Leadership, and Character to serve as the backbone of a Highland education.

References

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