Attacking the weak links

Decoupling the stages of consumption

Advertisements

Oh, they’re crafty, those digital startups. They look at business in a new way, and they find the weak links.

That’s what we’re trying to do — see the newspaper business in a new way, find those weak links. We’re reviewing the findings of Thales Teixeira, a Harvard Business School professor, as presented at the 2017 New England Newspaper Convention.

As discussed in our last post, Teixeira attributes the first wave of digital disruption to the strategy of “unbundling.” Digital start-ups unbundled newspaper content, separating it out and offering it up, piecemeal.

Teixeira attributes the second wave of digital disruption to the strategy of “decoupling.” He defines it as “the breaking of links between consumer activities that have traditionally been done together.”

Consider the evaluate — choose — purchase — consume steps that often occur under one retailer’s roof. Once upon a time, to buy a TV, you’d go to Best Buy, and:

  • talk to a salesperson and look at different models (evaluate)
  • make your selection (choose)
  • buy it (purchase), and
  • take it home and begin using it (consume).

Now, Amazon and Pricegrabber apps have broken the evaluate — choose link. Using an app, you can compare prices online and make an online purchase while you’re still standing in the Best Buy store. (That customer behavior, by the way is called “showrooming.”)

I don’t know about you, but I need to run through more examples of decoupling until I can easily see the stages, the links between them, and how and why they broke. First, though, we need to add one more concept, the valuation of each activity, or stage.

Decoupling separates the stages of a buyer’s decision-making process, some of which create value for the customer and some of which do not. According to Teixeira’s findings, each stage or activity, either:

  • creates value for the consumer,
  • captures value for the producer, or
  • erodes value for the consumer without capturing value for the producer.

This is an important concept to grasp, because Teixeira has found that decoupling disruptors that decouple and offer value-creating activities seem to be highly valued in the marketplace; those that decouple and offer value-eroding activities earn a relatively low valuation; and those that decouple and offer value-capturing activities seem to be valued in the middle.

It’s also an important concept because, once you get it, you can more easily see why a decoupling strategy worked, disrupting the target business model.

Think about it, and stay tuned.

This is the third in a series of posts reviewing a presentation given by Thales S. Teixeira, Harvard Business School professor, at the 2017 New England Newspaper Convention. If you’d rather read Teixeira straight, visit his working knowledge papers. To read this series in order, please view:

  1. Time for a new recipe — Why do digital disruptors succeed?
  2. Breaking apart the product — Disaster by another name: unbundling

Author: TAM

For more about me, please visit https://savemydaily.wordpress.com

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s