Summary: Blueprint to the Digital Economy

Review and Analysis of Tapscott, Lowy and Ticoll's Book

BusinessNews Publishing

• Publisher: Must Read Summaries
• Year: 2016
• eBook ISBN: 9782806222718
• Topic: Business
• Subtopic: Information Management
• Index: Business

The must-read summary of Don Tapscott, Alex Lowy and David Ticoll's book: `Blueprint To The Digital Economy: Creating Wealth in the Era of E-Business`.

This complete summary of the ideas from Don Tapscott, Alex Lowy and David Ticoll's book `Blueprint To The Digital Economy` shows that the digital economy – computers teamed with communication networks – has the potential to transform almost every consumer and business activity. These changes are having the effect of forcing organizations to amend notions and practices about the nature of competition, the process by which wealth is created and even the nature of the firm itself. In short, the digital economy changes every assumption ever made in business. It is also allowing completely new commercial entities – like e-business communities which use the digital economy to conduct commercial transactions and collaborate to create new wealth – to flourish and grow like never before. And it is forcing established firms to enter into partnerships and alliances with entirely different and disparate business entities. Clearly, the digital economy opens enormous possibilities and opportunities. The challenge lies in turning the possible into the probable and then into the actual.

Added-value of this summary: 
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To learn more, read `Blueprint to the Digital Economy` and discover the perfect guide to getting acquainted with the rules of the digital economy.

Summary of Blueprint to the Digital Economy (Don Tapscott, Alex Lowy, David Ticoll)

Part 1

The New Rules of Competition in the Internet Era

Main Idea

The Internet is having a major impact on the way business is conducted in five specific ways:

1. E-business communities are evolving in which firms, suppliers and customers work together to create added value.
2. Businesses are using the Internet to learn and envision what they need to do in the future rather than simply reacting to market transformations as they emerge.
3. Immediacy -- the ability of organizations to combine specialist knowledge resources with speed of execution to produce dramatic performance improvements -- is the driving force of the Internet economy.
4. Co-evolution -- the partnering of many organizations making complementary adaptations -- lies at the heart of new wealth creation.
5. Sustainable Internet business models depend far more on the organizational structure and human resources of the firm than on short-term and unsustainable market valuations.

Supporting Ideas

E-business communities are evolving in which firms, suppliers & customers collaborate to create added value.

Throughout history, whenever new information technologies have become available, they have caused changes to occur in the way business organizes itself. The same is true in the Internet era. Specifically, four types of e-business communities (EBCs) are emerging:

1. Open Market -- A self-organizing EBC where anyone can buy or sell goods without restriction. The low entry barriers generally means the ability to create substantial added value is limited, and being in the right place at the right time with the right product offering becomes of paramount importance.
2. Aggregation -- An EBC in which one company (Wal-Mart or America Online, for example) positions itself as an intermediary between producers and consumers. Added value is again limited, with volume becoming important.
3. Alliance -- This type of EBC has a leader who proposes an idea or suggestion on how to meet customer expectations and create added value. Producers then work in with the standards suggested by the leader. Customers have the assurance what they are buying is vouched for by someone they trust. Examples: Visa International, the Java Alliance
4. Value Chain -- The key focus for a value-chain EBC is on optimization of a business process to create operational efficiencies or added value. Again, this EBC will have a leader (Cisco Systems, for example) who will work with producers to leverage the added value it can create and deliver to customers.

The best business strategy to use in any specific situation will be EBC-specific. In fact, many digital business strategies are focused exclusively on attempting to influence the transition process from one type of EBC to another.

Businesses are using the Internet to learn and envision what they need to do in the future rather than simply reacting to market transformations as they emerge.

Since businesses cannot be certain what the future holds, the optimum approach is clearly to develop a robust ability to respond quickly to changes in consumer tastes and demands.

Any organization interacts with its customers in two ways:

1. It makes offers to them -- a “make-and-sell” strategy.
2. It responds to requests from them -- “sense-and-respond”.

The Internet is forcing the traditional make-and-sell style firms (airlines, automotive) to move more towards sense-and-respond style firms (consultants, outsourcers, designers). Smart companies are anticipating these changes through the use of scenario planning. This strategic planning system:

1. Develops four alternative scenarios for the future -- two of which use the make-and-sell strategy and two of which use the sense-and-respond strategy.
2. Catalogues what the steps would be between present reality and that scenario being realized.
3. Analyzes how best the firm should respond if that scenario evolves in reality.

By doing this:

1. Decision makers become attuned to change indicators.
2. Risks and rewards can be carefully evaluated.
3. The firm can be proactive in moving towards its future.
4. Ideas can be tested against external sources of expertise.

Immediacy -- the ability of organizations to combine specialist knowledge resources with speed of execution to produce dramatic performance improvements -- is the driving force of the Internet economy.

The most profound business transformations driven by the network economy are:

1. The greatest rewards go to those organizations that can sense and respond to change most rapidly.
2. In the information age, collective knowledge of an organization -- information that has been put into a meaningful context -- is the most valuable asset.

The most successful companies of this era will combine speed...

Table of contents

• Title page
• Book Presentation
• Summary of Blueprint to the Digital Economy (Don Tapscott, Alex Lowy, David Ticoll)
• About the Summary Publisher
• Copyright