Blown to Bits
By Philip Evans & Thomas S. Wurster
Harvard Business School Press * US$27.50
IN BLOWN TO BITS, PHILIP EVANS AND Thomas S. Wurster explain how the Internet's growth is creating a new economic model that is actually destroying traditional business strategies. The idea for this book sprang from an award-winning article that appeared in the Harvard Business Review titled Strategy and the New Economics of Information.
Following the original article--that some say is better than the book, its authors, two senior executives at Boston Consulting Group, conduct a thorough autopsy of the defunct traditional business strategies. Before the boom of the World Wide Web, businesses had two options when providing the public information about products and services. Evans and Wurster define those options as "richness" and "reach." The concept of richness refers to the quality and detail of the information, while reach refers to how much of the public receives it. The mathematical equation was simple: more richness meant less reach, and vice-versa.
But the Internet has obliterated that old axiom and made it obsolete. Copious amounts of information as well as high-quality products now reach huge numbers of people. Richness and reach are no longer necessarily in opposition.
As Evans and Wurster explain in their book, the Internet is changing traditional channels of information between companies and their employees, suppliers and their clients, eliminating intermediaries, erasing hierarchies at the very heart of the enterprise and transforming the model of consumer loyalty. These changes lead to what the authors call deconstruction, or "the dismantling and reformulation of traditional business structures." After the "explosion" of the old business structures, the pieces recombine into new structures which are fundamentally based on two separate economics: the economics of things (or traditional economics) and the economics of information. The authors point to the newspaper business as an example. Before the communications revolution, the economics of things (printing presses and distribution) tied together the information content of newspapers. However, since the advent of online delivery of...