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

Philip Evans (Author), Thomas S. Wurster (Author)

Book Description

Publication Date: October 1, 1999

Richness or reach? The trade-off used to be simple but absolute: your business strategy either could focus on 'rich' information - customized products and services tailored to a niche audience - or could reach out to a larger market, but with watered-down information that sacrificed richness in favor of a broad, general appeal. Much of business strategy as we know it today rests on this fundamental trade-off. Now, say Evans and Wurster, the new economics of information is eliminating the trade-off between richness and reach, blowing apart the foundations of traditional business strategy. "Blown to Bits" reveals how the spread of connectivity and common standards is redefining the information channels that link businesses with their customers, suppliers, and employees. Increasingly, your customers will have rich access to a universe of alternatives, your suppliers will exploit direct access to your customers, and your competitors will pick off the most profitable parts of your value chain. Your competitive advantage is up for grabs. To prepare corporate executives and entrepreneurs alike for a fundamental change in business competition, Evans and Wurster expand and illuminate groundbreaking concepts first explored in the award-winning "Harvard Business Review" article "Strategy and the New Economics of Information", and present a practical guide for applying them. Examples span the spectrum of industries - from financial services to health care, from consumer to industrial goods, and from media to retailing. "Blown to Bits" shows how to build new strategies that reflect a world in which richness and reach go hand in hand and how to make the most of the new forces shaping competitive advantage.

Editorial Reviews

Amazon.com Review

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. --Dan Ring

From Booklist

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. David Rouse

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Product Details

• Hardcover: 261 pages
• Publisher: Harvard Business Review Press; 1 edition (October 1, 1999)
• Language: English
• ISBN-10: 087584877X
• ISBN-13: 978-0875848778
• Product Dimensions: 9.5 x 6.5 x 1.1 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 3.9 out of 5 stars  See all reviews (64 customer reviews)
• Amazon Best Sellers Rank: #889,450 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

87 of 89 people found the following review helpful:

5.0 out of 5 stars Searching for the intersection of Strategy and Information, January 14, 2000

By A Customer

This review is from: Blown to Bits: How the New Economics of Information Transforms Strategy (Hardcover)

Your reaction to this book will depend very much on the training and perspective you bring and why you want to read it. If you are much like Charles Ferguson, the author of the excellent "High Stakes, No Prisoners," you already have intimate knowledge of this industry and its players, AND you have a strong grasp of both technology and economics. The marginal gain from this book will be de minimus, but you will appreciate its clarity and scholarship.

I think I understand more about business strategy than an average bear, but I also believe that a bunch of children are creating a new reality that is destroying those models, and I began reading some books--this was one of them--to help me try to understand what that will mean for business strategy. I found the book valuable. While I think some of the authors' opinions--consider the hypothesis at the top of page 107--beg to be tested empirically, the references are both current and relevant, the book is clear, and I found it thoughtfully done. You don't have to be an academic to read it. The authors don't use much jargon that they don't explain, and they go to some lengths to avoid using words like isoquant.

I'd contrast this book with the very popular "Killer App," which I found trivial. "Blown to Bits" is superior in its clarity and breadth, and in the quality and relevance of its cited source material. I mention the contrast only because you may tend to listen more carefully to people who know a lot about what they are talking about, and my impression is that Evans and Wurster do.

If you are reasonably well-trained or experienced in business strategy, but feel like you need to better integrate the transformation to an information-based economy into your models and your thinking, I recommend this book.

52 of 55 people found the following review helpful:

4.0 out of 5 stars Great Ideas, Bloated Prose, January 31, 2000

By 

Michael L. Perla - See all my reviews

This review is from: Blown to Bits: How the New Economics of Information Transforms Strategy (Hardcover)

This is no doubt a timely and insightful book. It does suffer from what many management/consulting books suffer from, convoluted sentences and polysyllabic word choices. Evans and Wurster, economists by training, and now BCG consultants, do have something to offer, however. Their analysis of many industries is piercingly accurate as to their value chain and profit zone (e.g., auto, brokerage).

The material areas the authors revolve the economics of things v. economics of info (when the former is sold it's gone; when the latter is sold, it can be sold again and again at a negligible cost); (2) the idea of reach v. richness seems to be the linchpin of their profound tome and is perfused throughout the book. This of people that can share a piece of information is inversely related to the quality of that information. Witness a salesman's pitch v. a direct mail letter - the former has greater richness and adaptability, while the latter has greater reach but less richness.

The book ends with some advice for businesses. According to the authors, the new digital game involves the application of applied economics, refined segmentation, and the analysis of value chain information flows. The authors encourage businesses to be contrarian, pre-emptive, and experimental. I agree that the HBR article is more parsimonious and lucid. Nevertheless, this is a solid book in the genre, and the authors clearly know this developing area. A worthy read overall.

44 of 46 people found the following review helpful:

4.0 out of 5 stars Great book -- not the Bible., July 5, 2000

By 

Steve Finnie - See all my reviews

This review is from: Blown to Bits: How the New Economics of Information Transforms Strategy (Hardcover)

Scenario: You go to the Museum of Modern Art and you've heard everyone talk about Monet's Water Lilies. You've looked around at a lot of the art and by the time you finally see the painting it doesn't seem spectacular so you're very disappointed. Well a lot of folks seem to have a similar reaction to this book. They've heard so much in the press and from supposedly "in the know" colleagues that when they finally read it they don't get what the hype was all about.

I'm of the opinion that while it isn't as revolutionary as some books that have received similar hype (Innovator's Dilemma, Competing for the Future), it is an excellent read. It has some strategic insights that are very useful for leaders and aspiring leaders in the developing economy. It helps motivate those in start-ups to aggressively pursue stodgy corporate America, while giving corporate America the kick in the pants it needs to shape up or lose out to these young guns.

Two knocks: it is difficult reading at times which while not neccesarily a bad thing (James Joyce isn't easy either) is a negative for time-constrained executives.

Secondly, some of the middle chapters were seriously deficient in value.

Suggestion: skip chapters 5-8 and the book becomes an enjoyable 130 page read.

Chapter 4: "Deconstruction" and Chapter 11: "Monday Morning" are both excellent.