Consumption Economics

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An increasing number of companies are considering the introduction of cloud systems as a means to transform their business model in a time when products do not sell (the age of consumption economics)

In recent years in the technology industry, products increasingly have highly advanced features and are more complex, but the gap between the features installed and those actually used by customers is widening. Under such circumstances, product upgrades (addition of features) no longer lead to customer value, leading many high tech products towards competition on price, the so-called road to commoditisation. Moreover, the change in buying model - from "own/purchase" to "use/rent" - is shifting the risk of product purchase from customers to sellers, making it more difficult for companies to secure profit. In this environment (the age of consumption economics), it has become harder to survive through the traditional method of "selling good products for less".

Meanwhile, the change in business models following the evolution of network technology is enormous. A shift is ongoing towards a multiplicity of devices that share and provide information and services between multiple products and companies, and this trend of moving to the network is emerging in many business settings both within and outside the office. There is increasingly high hope for cloud technology, which allows the establishment of a flexible and scalable business model that only requires a small initial investment, and can adjust to volume of consumption. An increasing number of companies are considering applying this to their business as a new strategic tool.

We at PwC PRTM Japan, which includes members originally from industry, have in-depth experience and knowledge regarding strategy and reform that uses network and cloud environments. We provide services that leverage our cloud transformation diagnosis tools, and our broad base of accomplishments and knowhow accumulated both in Japan and abroad.

The consumption gap