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Summary: Surviving business will occupy unique & evolving positions
Review: 1. The basis of your business decision-making shift from guessing to knowing.
2. The value proposition you offer to your customers shifts from a mismatch to a perfect fit
3. Information flow with your company shift from lag time to real time.
4. Your customer service model shifts from supplier service to customer self-service
5. The use of your employees' time shifts from predominantly low value-added to maximum talent leverage
6. Your processes shift from a focus on fixing errors to preventing them
7. Your productivity growth pattern shifts from a norm of 10 percent improvement to 10X productivity improvement
8. Your organization shifts from collection of separate silos to integrated system in which information, ideas, and solutions are shared.
Authors Adrian Slywotzky and David Morrison illustrate these DBD principles in case studies of Dell, Cemex, Charles Schwab, Cisco, GE, and IBM. "It's important to have hands-on, high-touch service available when needed. But, by digitizing services that don't require in-person assistance, the overall cost structure is improved, customers receive better service, and profitability is greater." "True productivity is measured by the needs and desires of customers rather than a company's business objectives." "10X productivity is important not just because it can and will help toward meeting the next quarter's earnings forecast, but because it releases money and frees it for investment in growth." "In mapping out your digitization strategy, start by asking: Which of the three areas-capital, cost, or cycle time- is most crucial to the economics of my business and my customer's businesses?"
In the mid 1990s Charles Schwab dominated the discount brokerage business. Schwab enjoyed stellar growth and was one of the most sure-fired innovators in the financial sector. In 1992, Schwab launched OneSource. In the same year, E-Trade offered a flat $14.95 commission on stock trades. Schwab's average commission was around $60 and profits were excellent. Customers wanted control over their information, processes, and services to make investments. Should Schwab go online and be exposed to a 75 percent reducing in commissions. Schwab had to decide between two paths: risking the whole company by moving to an online service online or keeping the traditional brokerage model. Schwab was willing to innovate, reinvent their products and services, and respond to it customers. Dan Leeman, Head of Strategy explained, "We created eSchwab because we wanted to learn. But we did not want to risk the whole company." eSchwab commission was $29.95 more than double E-trade. Schwab position was not price differentiation; rather, it was a response to customer's demands for speed, convenience, and ubiquity of on-line investing-value added investing. The online services were separate from the rich services provided by the traditional brick and mortar high-touch services. Customers were telling Schwab that reintegrating eSchwab into the traditional brokerage division was the right way to go. The result would be commission compression. Schwab bit the bullet and announce reintegration and a commission structure of $29.95 up to 1,000 shares, online or off. 1998, at the Golden Gate Bridge, David Pottruck handed out jackets with the slogan "Crossing the Chasm" embroidered on the back and then led them on a walk across San Francisco Bay. The dropping commission income caused Schwabs stock market capitalization to plummet, falling $2 billion. Volume began picking up and Investors recognized the volume increase and reward Schwab by investing again in the company. Schwab's market value grew to $23 billion more than double the summer low. One investor said, "I like the fact that Schwab has bricks-and-mortar building. I think it's the skepticism I have about the start-up. I'm nervous because all their money is electronic... It's worth the price to have the brand name and reliability of Good Ol' Schwab." "Where a digital presence offers speed and convenience, the physical presence offers a basis for building trust. In many businesses, customers insist on both."
DBD will cause company cultures to change and cause digital to spread to every division, department, and business process. How fast is your business? Can you make quick decisions? How rapidly can you act when a decision is made? Being fast is a matter of mindset. But being fast but wrong gains you nothing; DBD goal is marketing and customer service that is dead-on accurate rather than more-or-less in the ballpark. Rapid change has a simple logic, when the world changes rapidly, you must change more rapidly. Change is a function of flexibility and flexibility is the product of good design. The Digital model allows for morphable changes in a short period of time. Factories must be reconfigured, rebuilt, or sold. All these steps take time, cost money, and distract attention from moves that can benefit customers directly. Therefore it is crucial not be saddle with resources that are not central to the business model: case in point, B&N (real-estate building verse Amazon online warehousing), the emerging eBook and rapid electronic publishing and high speed low cost printing.
"Business with the insight and courage to redesign themselves as needed to achieve and sustain place in the minds of customers as well as growing share of sales and profits...businesses that know how to take advantage of both traditional and digital options to create and occupy unique and continually evolving position in a rapidly changing economic universe."
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Summary: Finally, a book about STRATEGY first
Review: As the books about digital technologies continue to pile up, you may wonder which ones to read, if any. The authors readily acknowledge this in their introduction, but claim differentiation from their focus on strategy first and technology second.They are smack on the money. Almost all books today speak about how the "Internet changes everything," how there is "this technology" and "that technology" that can turn your company into a super power. What they don't consider is how your business model itself is affected. As a businessperson, it is the latter that I want to understand - how will my strategies need to change, and what are the new concepts I should integrate into my current strategy to ensure competitiveness over the next year or two. This is the focus of the book. You have already seen many of the companies that are covered - Cisco, Dell, GE - but they are now dissected with a focus on their strategies rather than technologies. Much more interesting are the discussions of trends and concepts that you can apply right away. For example, as customers change from passive to active, how can you leverage that trend to enable faster growth and better service? A second example involves the Choiceboard, a strategic tool you can use to raise your business model. As I see dot.com's falling like flies, I continually consider how they would have fared if they could have focused on their business model rather than just introducing cool new technologies. While the book was weak on the technology side, I was fine with that. My priority is to focus on my business model first, and then to understand which technologies will get me where I want to go. Overall, I'd highly recommend it for any strategist. Those with a deep focus on technology may be dissatisfied, but anyone who is concerned with their business model will find much insight within.
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Summary: Real Insights, Practical Tools, Great examples
Review: As the world turns, firms are coming to realize that the real action in the digital space is --quietly, quickly and systemically -- seeing what new profit options digital technologies can open up for your customers and your firm. This book sets important frameworks for thinking, provides great checklists and templates, and goes through important examples on how it has been done. A great companion to this is "Net Ready" by Amir Hartman and John Sifonis -- Read Slywotsky's book first --then use Net ready tools to continue through implementation. (These two books are the basis for the "Coaching in the Converging Economy" course in the MBA Program in the Smeal College of Business at Penn State.) "How Digital is Your Business" reflects great thinking, practically tuned.
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Summary: Written for 9th graders
Review: First five chapters are on Dell's configurator "Choice board". This one is a total waste of time. Not technical, not re-invent the business. What is the audience here?
Rating:
Summary: Written for 9th graders
Review: First five chapters are on Dell's configurator "Choice board". This one is a total waste of time. Not technical, not re-invent the business. What is the audience here?
Rating:
Summary: A Classic Strategy book about Digital Business Design
Review: I am writing this review as a part of MBA/MSE class participation Is not a book on Internet or e-commerce, it is a book on Digital Business Design. Digital Business design is a new emerging Business model that would fundamentally change how business is done . The book does justice to this statement by explaining what DBD is, how it has evolved, what are the various components of DBD, what are the benefits of DBD, how it can be used to expand a company's strategic options and by presenting case studies of how the early pioneers of DBD have used it. The book does not just try to preach something but the theme of the book is how to practice DBD, and to form a strategy to implement it. Through out the book, there are checkpoints to access the reader's company and where it falls in the DBD quadrant, what are its customer issues, what strategy needs to be implemented to move to the reference point in the DBD Matrix. The author enfolds many techniques used by DBD to implement the classic "Think Atoms and Bits" strategy. The book differs fundamentally from other Business strategy books like " Digital Darwinism", in the sense where others try to preach ways to survive in the Digital world, this books talks about making a Unique Differentiation. Also "Digital Darwinism" lacks the depth in terms of strategy which this book provides, where the former presents case studies of companies who have successfully implemented the seven breakthrough ideas to survive in the digital world, it does not talk of fundamental business design. Also "Digital Darwinism" talks about using Internet wherever possible, whereas "How Digital is your Business" talks about Business first, Design second and then being digital. "How Digital is your Business" also does not preach to use technology for its own sake, but first to evaluate your business issues and only if DBD is going to solve these issues implement it.
Rating:
Summary: A Classic Strategy book about Digital Business Design
Review: I am writing this review as a part of MBA/MSE class participation Is not a book on Internet or e-commerce, it is a book on Digital Business Design. Digital Business design is a new emerging Business model that would fundamentally change how business is done . The book does justice to this statement by explaining what DBD is, how it has evolved, what are the various components of DBD, what are the benefits of DBD, how it can be used to expand a company's strategic options and by presenting case studies of how the early pioneers of DBD have used it. The book does not just try to preach something but the theme of the book is how to practice DBD, and to form a strategy to implement it. Through out the book, there are checkpoints to access the reader's company and where it falls in the DBD quadrant, what are its customer issues, what strategy needs to be implemented to move to the reference point in the DBD Matrix. The author enfolds many techniques used by DBD to implement the classic "Think Atoms and Bits" strategy. The book differs fundamentally from other Business strategy books like " Digital Darwinism", in the sense where others try to preach ways to survive in the Digital world, this books talks about making a Unique Differentiation. Also "Digital Darwinism" lacks the depth in terms of strategy which this book provides, where the former presents case studies of companies who have successfully implemented the seven breakthrough ideas to survive in the digital world, it does not talk of fundamental business design. Also "Digital Darwinism" talks about using Internet wherever possible, whereas "How Digital is your Business" talks about Business first, Design second and then being digital. "How Digital is your Business" also does not preach to use technology for its own sake, but first to evaluate your business issues and only if DBD is going to solve these issues implement it.
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Summary: A great book on digital business design
Review: I am writing this review for a MBA/MSE class assignment If you wanted to know to basics of digital business design and how companies like Cisco, GE, Dell, IBM, Yahoo, and Ebay got started, this is the book for you. The book devotes a chapter to each of these companies and tells how they all got started and how they made the conversion to going digital, basically "moving bits instead of atoms" or moving information instead of physical assets. This book does not go into any detail about each company's respective technology so it is not recommended as a technical book. Also, by being published in 2000, I think its kind of neat to see how each company has dealt with the issues they needed to face in order to survive in their respective industry. Basically, these companies are constantly reinventing themselves to fend off competition. In addition, companies are reinventing themselves to satisfy the needs of the customers. For example, Cisco kept on acquiring business not for profit, but to satisfy the technology needs of the customer. The authors talk about how business shouldn't go digital just to go digital. If a company doesn't have a good business plan, it still won't have a good business plan if it goes on the web. It might be more efficient, but it's still not a good business plan. The authors keep on stressing the order of importance for any company is business plan first, design second, and going digital third. The book shows how Cemex, a cement company with no business going digital, can even be successful in this digital world. Another point the authors keep on stressing is how all companies should strive to move to this "northeast quadrant" in a digital business design matrix. Basically you want to move away from southwest quadrant which entitles weak business design. If you belong to the northwest quadrant (ie the dotcoms), you should move east. The book shows how the two dotcom companies, Yahoo and Ebay, got themselves to the northeast quadrant. If also shows how "older" companies such as IBM and GE that were in the southeast quadrant, reinventing themselves so they could move northward into the northeast quadrant All in all, I found this book fairly easy to read. With my limited exposure to digital business design, I wanted to know the basics and how all the successful companies cited in the book got to where they are today.
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Summary: Cracker
Review: I just loved their fourth book. The great concept was "Value Migration". Then it developed into "The Profit Zone" and the business-design. Business-design formulation was made a lot easier and detailed in the "Profit Patterns". Now comes "How Digital Is Your Business". The book makes the business-design concept highly practical by showing how to use digital technology to establish Learning Relations with the customer and how to impress them. This is really a great book for anyone who is into strategy. It is a must amid all Internet mumbo-jumbo. Congratulations.
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Summary: Forcing the issue
Review: I thought the first three books by Slywotsky and co. were really good. But this one is really awful. The content -- digital business design -- can be summarized in one page. They just try to keep stretching the material to complete a book -- for the sole purpose of selling. The same point keeps being repeated again, again, and gain. Check the bibliography and read the sources. They are much better! Read the Profit Zone, Value Migration and Profit Patterns. They are much more relevant today though many principles are extremely difficult to apply in today's very unpredictable environment.
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