Deconstruction of Value Chain happens when a company deals with significant environmental change.
Check list of Deconstruction
When Deconstruction is implemented, BCG that proposed this concept raise 5 points below
1. Which step in Value Chain generated less value compared with the cost?
2. Is the company's business a part of customer's Value Chain or whole of it?
3. Which step in Value Chain can be affected by network
4. Which assets of the company are most likely to be debt in the future?
5. What activities or abilities the company will need?
Examples of Deconstruction
Conventional Value Chain
Layer Master builds competitive advantages by focusing on specific value added activity like Intel, Microsoft or Shimano producing high-end bicycle
Orchestrator adds value by focusing on core value added activities like DELL.
Market Maker occupies specific sales channel like household appliance discounters or agencies.
Personal Agent is agency as navigator for consumers like Amazon.
Industries in which Deconstruction happens
Industries in which there are strong business models
Industries in which there are many regulations
Industries running in specific areas
Industries having high possibility of technology innovation
Industries having inefficient tasks