BUS809: VALUE CHAIN COMPONENTS

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BUS809 VALUE CHAIN COMPONENTS
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Lecture One Outline

• The Consumption Chain
• At Each Stage of the Consumption Chain
• Stakeholder Performance Expectations

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The Consumption Chain

• While many companies focus on their products and
  services to create a differentiation strategy,
  MacMillan and McGrath (1997) argue that in fact,
  a company has the chance to differentiate itself
  at every point of contact

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The Consumption Chain (contd)

• From the moment customers realise that they need
  your products or service to the time they no
  longer need it, companies can capture the
  customers entire experience with product and
  servicewhat we call the consumption chain.

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The Consumption Chain (contd)

• The process of mapping the consumption chain can
  help companies to identify opportunities in which
  value can be added to products and services.

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The Consumption Chain (contd)

• There are a series of questions involving with
  mapping consumption chain process.

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The Consumption Chain (contd)

• How Do People Become Aware Of Their Need For Our
  Product?

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The Consumption Chain (contd)

• How Do They Find Our Offering?

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The Consumption Chain (contd)

• How Do They Make Final Decisions?

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The Consumption Chain (contd)

• How Do They Order And Purchase Our Product?

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The Consumption Chain (contd)

• How Is Our Product Delivered?

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The Consumption Chain (contd)

• What Happens When Our Product Is Delivered?

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The Consumption Chain (contd)

• How Is Our Product Installed?

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The Consumption Chain (contd)

• How Is Our Product Paid For?

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The Consumption Chain (contd)

• How Is Our Product Stored?

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The Consumption Chain (contd)

• How Is Our Product Moved Around?

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The Consumption Chain (contd)

• What Are Customers Really Using The Product For
  And What Does Having/Using The Product Mean To
  Them?

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The Consumption Chain (contd)

• What Do Customers Need Help With When They Use
  Our Product?

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The Consumption Chain (contd)

• How Are Complaints, Returns And Exchanges Handled?

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The Consumption Chain (contd)

• How Is Our Product Repaired Or Serviced?

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The Consumption Chain (contd)

• What Happens When Our Product Is Disposed Of Or
  No Longer Used?

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At Each Stage of the Consumption Chain

• The consumption chain is essentially about asking
  a number of probing questions at each stage.
  Rudyard Kiplings Six Honest Serving Men are
  these questions

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At Each Stage of the Consumption Chain (contd)

• WHAT What are customers doing then? What else
  could they be doing? What problems are they
  experiencing? What are they thinking?

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At Each Stage of the Consumption Chain (contd)

• WHERE Where are customers? Where else could they
  be? Where do they make purchases? Where do they
  dispose of used products?

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At Each Stage of the Consumption Chain (contd)

• WHO Who is the customer? Who is with the
  customer? Who could be with the customer? Who is
  in the customers mind?

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At Each Stage of the Consumption Chain (contd)

• WHY Why do customers make the decisions they do?

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At Each Stage of the Consumption Chain (contd)

• WHEN What time of the year, month, week, and day
  is it? Is the best time? Is it a convenient time?

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At Each Stage of the Consumption Chain (contd)

• HOW How is this being done? How else might it be
  done? How do customers make purchases?

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Discussion Questions

• Describe each stage of the consumption chain in
  terms of an product you are familiar with.
• How can companies benefit from using the
  consumption chain? cite examples in your answer.
• How does the consumption chain compliment or
  detract from the value chain paradigm? Why or why
  not?