From the late 1990s to the early 2000s, there was a brand that held the No. 1 share in the global mobile phone market. It is Nokia, a Finnish manufacturer. Why has Nokia, which had been at the top of the market for a long time, been on the decline since the 2010s when the smartphone craze began? In fact, Nokia has been awarded several awards as an innovative company by investing heavily in various technologies related to smartphones. It was not lagging behind because of technology problems. Professor Teixeira of Harvard Business School says, "It was destroyed by companies focusing on customer needs." Let's look at what a 'destructive company' is that occupies the market in an instant, what is the core principle of destruction, and what is it in two series of contents.

[Series preview]
① Decoupling, the core principle of destructive enterprises (→ we are here now!)
② Countermeasures and Utilization of Destructive Enterprises

Laptop, how do you buy it?

In the past, it was common to visit electronics stores in person to see the products displayed on display and purchase them with the help of employees. The whole process of getting information on new products and special offers, checking the differences, strengths and weaknesses of each product, and making final purchase decisions was done in one space. Things have changed these days. This is because more people are looking for the lowest-priced products through online search after experiencing them in offline stores. The reason why customers visit the store is not to look around all the products. Some products have already been selected based on the information they have collected such as reviews. Some customers know more about the products than employees. The days when employees' speaking skills and kindness determined sales performance are over.

The emergence of disruptive companies that overturn the market game played a major role in such a change in electronics purchase speed. For example, Amazon has greatly contributed to forming a shopping culture that compares prices before purchasing. Amazon allows offline store shopping customers to compare prices with products registered in Amazon shopping malls by searching by product name, scanning barcodes, and taking photos. The products are to be seen directly in stores, and actual purchases are to be made at Amazon. Thanks to this disruptive company, the "Customer Value Chain (CVC) of customers who "evaluate, select, purchase, and consume products" has been broken. Amazon has boldly taken over the middle stage of the chain, and customers are welcoming it. All customers want is to get the products that work best for them at the most reasonable price. It was only companies that monopolized or oligopolized existing markets that made them cry.

Decoupling, the essence of a well-thought-out strategy

Professor Teixeira of Harvard Business School studied hundreds of large and emerging companies persistently for eight years. As a result, he discovers a pattern called "decoupling." The literal interpretation of decoupling is "dismantling" and "breaking up." Professor Deixeira says that companies such as Twitch and Airbnb, which have no special technology, have become giants only with aggressive decoupling. After looking at the value chain of customers in certain industries and categories, they quickly dominated the market by snatching the consumption stage where customers complain of inconvenience.

Take the taxi industry as an example. Remember when we used taxis in the past. When I took to the streets and saw a taxi with the "empty" indicator on, I waved to him. I remember having to wait for a taxi forever, and I once walked far down the main road in search of a taxi. I also had the experience of being denied a ride because I was going in the wrong direction when I managed to get a taxi, and I was cut in line by a person who suddenly appeared. There were a lot of times when people took a long detour and got ripped off. Customers had to experience a lot of inconveniences in the process of using a taxi like this.

Like a comet, a company appears to relieve customer inconvenience. A car-sharing service has emerged that allows you to use a vehicle for a while without purchasing a car. The chain of owning a vehicle breaks. Taxi dispatch services have been created to allow you to call, book, and choose a vehicle. The value chain of dispatch and transportation service quality, which was entirely left to luck, has been shattered.

Devastating innovation through market destruction

Disruption refers to innovation that goes beyond the improvement of existing products and shakes the market by forming new markets such as fintech and autonomous vehicles. On the other hand, decoupling refers to entering the market in a way that takes up one or several steps by separating some of the customer's value chain, which was fully managed by the existing market-occupying company. It's not about competing with technology that wasn't in the world like Disruption, but succeeding in the market by satisfying the hidden needs of customers!

Professor Teixeira says that in some cases, decoupling business models lead to more disruptive changes than new technologies, and disruption can occur as a result of decoupling. He points out that decoupling is happening in all industries around the world, especially, stressing that "companies need to reduce their interest in startups and focus more on the values their customers want." Because it's the customers that drive the market, and they act in a way that enjoys their own interests.

It should be noted that decoupling is a "business model" that isn't incredible technology or the best quality. Success depends on what value it brings to customers. TV network viewership has plummeted to around 1 percent, with YouTube app usage increasing every year since 2019, exceeding the average per capita usage by 40 hours in 2024. It turns out that Airbnb, which provides accommodation-sharing services, is not a big-name hotel chain, but rather a hotel chain, accounts for about 26 percent of the global accommodation market. If you understand the key principles of this change, you will have plenty of opportunities to respond effectively and counterattack.

1) Wise App, Retail, Goods, YouTube App Monthly Usage Time Trend, January 2024
2) Apptopia, 2022

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