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Recommended Readings: Business Strategy

 

Strategy And The New Economics Of Information by Philip B. Evans and Thomas S. Wurster

We are in the midst of a fundamental shift in the economics of information, a shift that will precipitate changes in the structure of entire industries and in the ways companies compete. This shift is made possible by the widespread adoption of Internet technologies, but it is less about technology and more about a new behavior reaching critical mass. Millions of people are communicating at home and at work in an explosion of connectivity that threatens to undermine the established value chains for businesses in many sectors of the economy.

The authors present a conceptual framework for understanding the relationship of information to the physical components of the value chain and how the Internet's ability to separate the two will lead to the reconfiguration of the value proposition in many industries. In any business where the physical value chain has been compromised for the sake of delivering information, there will be an opportunity to create a separate information business and a need to streamline the physical one. Executives must keep examining the potential to deconstruct their businesses to see the real value of what they have. If they do not, someone else will.