Consumption Chain

A consumption chain is a set of linked activities that describes how a consumer uses a product. Rita Gunther McGrath and Ian MacMillan, in The Entrepreneurial Mindset; Strategies for Continuously Creating Opportunity in an Age of Uncertainty (Boston, MA: Harvard Business School Press, p. 94).

A consumer driving a car might count in his or her consumption chain, shopping for the car, now probably on-line, trying the car out, financing the car, taking possession of the car, driving the car, fueling the car, maintaining the car, repairing the car when needed, and disposing of the car eventually.

Each of these steps has it's own value chain associated with it when looked at it from the producer's perspective. Of course, now increasingly consumers and producers are the same.

Sketching on paper the consumption chain of a user of your product or service is a very useful thing to do. I do it about two or three times a year. Things are chaning so fast out there, you have to do it more than once a year.

Such an exercise shows you the steps the user goes through and shows you places where you can improve your service or build a whole new business. Those companies you see advertised on tv who give car owners a whole new way of shopping for cars found it out by examinging the consumption chain of car buyers and the consumption chain of sellers.

What do you think? Post a comment. I'd like to know.

Entrepreneurship informs all my professional activities. For entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for entrepreneurial writing, to www.kearneymusicschoolmurders.com/blog.