Blur by Abbydoc


The Speed of Change in the
   Connected Economy

    By: Stan Davis & Christopher Meyer

             PREPARED BY:
             PREPARED BY
              BEN COOPER
              BEN COOPER
             ELLISON HURT
             ELLISON HURT
             STEFANIE NALL
             STEFANIE NALL

What is the Blur?
         Stan Davis and Christopher Meyer, the authors of Blur, attempt to explain how “the speed of
change in the connected economy” has altered the way we look at business. The three elements that
make up Blur are speed, connectivity, and Intangibles. They defined these terms on page 5 as the
Speed:           Every aspect of business and the connected organization operates and changes in real
Connectivity: Everything is becoming electronically connected to everything else: products,
                 companies, countries, everything.
Intangibles:     Every offer has both tangible and intangible economic value. The intangible is
                 growing faster.
Blur:            The New World in which you will come to live and work.
         The book then looks at how business roles are becoming blurred and new rules are continually
being made. No longer can a business be happy were they are, they must continually look for where
to go next. “The Blur economy has three basic parts, the blur of desire, the blur of fulfillment, and the
blur of resources” (Davis 14).
         The Blur is also found when dealing with products and services. The authors say that offering
a product without backing it with quality service is worthless. With the increase of importance of
intangibles, services must always be attached to a good.
         They also feel that bundling of products was one of the first steps towards a blurred economy,
but that it needs to go even farther to where the bundling of products automatically includes a service
as well. A Company that has been highly successful using this concept is Dell Computer Corporation,
which sells computers backed by 24-hour services.
         The book then goes on to talk about the importance of a service that can be accessed from
anywhere and at anytime and that will automatically customize to that particular user. Services must
be highly interactive and be able to adapt as quickly as the blur economy itself. Along with services,
business models must also be adaptable at an ever-faster rate of time. As the blur economy continues
to gather momentum, both products and services must be able to keep pace. These concepts are
interesting, but many are outdated. As the authors say, the world is moving faster than ever and a
book published in 1998 may largely consist of “old news”.

The Exchange
        In the exchange between the buyer and the seller, it is becoming more difficult to determine
just who each is in the transaction. Buyers are beginning to look like sellers, while the seller is taking
on the characteristics of the buyer. An example of this can be seen in the fees that are paid to a retailer
to obtain shelf space for a product. Normally, one would think of the retailer as the buyer and the
manufacturer as the seller, but this is a clear case of just the opposite. However, the “real estate” is
becoming more important in this blur economy than the actual product itself until it begins to sell.
The Intangibles are also increasing their importance in the exchange, making money not the only
medium of exchange anymore.

The Highway
        Davis and Meyer describe the exchange as a six-lane highway between the buyer and the
seller. These lanes are the economic lane, the information lane, and the emotional lane. Their defined
as follows:
Economic:        The goods and the “money” that is paid for them. An example of this would be
                 frequent flyer miles in which the seller is paying the buyer “money” for their choice of
                 airline and loyalty obtained through customer satisfaction.
Information: Buyers used to be silent in all transactions, but now there is almost an equal amount of
                 information flowing from the buyer to the seller as is flowing from the seller to the
                 buyer because the seller believes the buyer’s information is a value-added. Real-time
                 information is becoming more important for the seller to provide especially since they
                 seller often knows everything about the buyer except perhaps their name and address.
                 However, buyers are becoming more willing to give the seller information as long as
                 they have not taken it without their permission.
Emotional:       This lane includes the Intangibles such as loyalty, esteem, excitement, and
                 engagement. It has been shown that the most successful ads, and thus their products,
                 are very relationship-oriented. Take Harley Davidson for example. This company
                 tries to give its customers a feeling of freedom and independence in a stressful world,
                 and their loyalty comes from this. “How many other products could inspire tough
                 guys to wear conspicuously labeled merchandise?” (Davis 69) Harley Davidson has
                 built upon the Intangibles that are becoming commonplace in today’s market.
The information highway of the past was only a two-lane highway with information flowing in one
direction, but now there are three lanes moving in each direction, and these traffic flows are the key to
the buyer/seller blur.

The Economic Web
        Today, a company cannot compete alone, and the success of today’s businesses not only
depends on the actions of the business, but more and more on the economic web of the business. The
web includes a company’s outsiders, competitors, and business environment. Their success comes
from the economic webs where every participant is a player in creating and claiming value; success is
all about these relationships. The webs appear when one company’s well-being depends on the
success of another. It is becoming more and more difficult to determine where a business ends and the
market begins.

The Market
        Davis and Meyer believe that the real markets that businesses are operating in today are
beginning to resemble financial markets more often. Real time prices are becoming a reality for all
types of products in the marketplace. In addition to real time prices, real time feedback is also an
important development. In this new market, a business must redefine its strategies to focus on speed,
Intangibles, and connectivity. The importance of speed means that a business must shift from
prediction, foresight, and planning to building in flexibility, courage, and faster reflexes. The
Intangibles component causes a business to increase the nonphysical portion of what they make and
sell. The connectivity aspect that is present in this blur strategy means that a businesses strategy
cannot be “us against the world.” Instead of operating alone in the market, each business must learn to
recognize the right players that they need to link with in order to be successful. In order for a
company to thrive in a blur economy, three outcomes must occur: a company must, let the market
manage your offer, let the market price your offer, and let the market market your offer. Since it is
difficult to determine where a business ends and the market begins, a company should let the market
decide because it can do a better job.

Adaptability and Change
        A large portion of the book focuses on adaptability and change. The authors believe that a
company must continually adapt to compete and survive. They suggest that the best way to do this is
to break up problems into little local pieces, and then solve them independently. These pieces are
called markets; therefore, each solution is the “market clearing price” for that particular problem. For
a company to adapt at these levels it should think of itself as an organism instead of a machine,
because machines can’t grow. The authors’ views towards adaptability are interesting; however,
sometimes their examples and suggestions are too “fluffy.” In other words, they make broad sweeping
suggestions that are often unrealistic in the real world.

          People are the most important resource in any business. This becomes even more important as
the “Blur” between home and work life increases. People used to “punch-in” at work, and not think
about work again until they “punched in” the next day. But today work comes home; managers check
their email and carry cell phones or pagers at all times. This makes the acquisition process even more
important as companies search to find employees that will fit in with their corporate culture. The
authors have a good grasp of how the employee/employer relationship is changing in the new
economy. They make some very valid and useful suggestions.

          A firm’s resources take two forms, people and capital. Tradition views capital in two ways -
fixed assets and money/financial capital. However, intellectual capital is the primary capital of the age
of “Blur”. Nike, for instance, possesses neither factories nor raw materials. Rather, it possesses
marketing acumen, design processes, positioning and distribution channels. In the age of “Blur”, one
should view capital as having 3 forms, Mobile Capital (assets are no loner the basis of firm value),
Just-In-Time Capital (outsource if possible), and Intangible Capital (brand image, customer
relationships, staff talent and business operations systems are the real value of the modern firm).

Teachings regarding capital can be summarized as follows:
1. Use it, don’t own it – outsource whenever possible; firm value is in intangibles.
2. If you do own it, use it – squeeze all possible value out of firm capital assets.
3. Design to throw away – design for obsolescence – create consumption goods not consumer
    durable goods.
4. Design to reconfigure – be sure that firm systems are designed with flexibility.

50 Possible Ways to Blur Your Business
The following lists some of the 50 ways in which a firm can “Blur” its business.
   Make speed your mindset
   Forget everything you knew about business economics
   Forget the law of diminishing returns
   Connect everything to everything
   Grow intangibles faster than tangibles
   Be able to do anything you do at any time
   Be able to do anything, anyplace
   Put your offer online
   Customize every offer
   Extract information from every buy/sell exchange

   Virtual location, virtual location, virtual location
   Don’t grow what you can buy
   Learn to partner, learn to split
   Create a platform, be a standard
   Let the market price your offer

                                       Works Cited
                                       Works Cited

Davis, Stan and Christopher Meyer. Blur: The Speed of Change in the Connected Economy.

      Reading, Massachusetts: Addison-Wesley, 1998.


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