Blown to Bits: How the New Economics of Information Transforms Strategy

Boston Consulting Group veeps Evans and Wurster won a 1997 McKinsey Award for an article they wrote for the Harvard Business Review that became the basis of this book. Starting with a detailed account of the "near-demise" of the Encyclopaedia Britannica as an example, Evans and Wurster show how "the new economics of information will precipitate changes in the structure of entire industries and in the way companies compete." They emphasize the role information plays in every business, and they demonstrate that companies will no longer be forced to choose between "richness" (the quality of information) and "reach" (the number of people who share that information) in their marketing mix. Trade-offs between those two factors are no longer necessary because of increasing connectivity and growing standardization. As a result, organizational supply chains and value chains (the increments by which value is added to products and services) are being "blown to bits" and reconstituted into separate and new businesses. Among the examples the authors use to demonstrate their proposition are automobile dealerships, brokerage companies, and banks.

Philip Evans and Thomas S. Wurster think that the Internet can blow away practically any business, and in Blown to Bits, they examine how the new economy is "deconstructing" industries such as newspapers, auto retailing, and banking while creating new opportunities for others. They write that the "glue that holds today's value chains and supply chains together" is melting, and that even "the most stable of industries, the most focused of business models and the strongest of brands can be blown to bits by new information technology."

Evans and Wurster, both executives of the Boston Consulting Group, argue that the Internet demands new business strategies because it provides companies tremendous "reach" for customers without sacrificing "richness," or the quality of the information about products and services. The book shows how some businesses–Microsoft and Intuit in personal finance, Dell Computer in retailing, and the Automotive Network Exchange in manufacturing supply–are thriving amid a rapid expansion of connectivity and the widespread acceptance of new technical standards on the World Wide Web. Clearly written and tough-minded, Blown to Bits is required reading for business leaders, entrepreneurs, strategists, and others concerned about the new economics of the information age.


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