Markets in today's world are becoming much more efficient, as a result of globalization, liberalization, a changing political climate, standardization, better insight into capital productivity and, in particular, information and communications technology (ICT). Consequently, since the 1970s, value has been created increasingly by networks of companies and to a lesser extent by vertically integrated corporations.

These developments were answered by business transformations, slowly at first, then at a faster rate during the 1980s and 1990s However, these transformations did not result in revolutions. Today, with the rapidly growing importance of phenomena such as network esternalities and the sunk cost industry, it is clear that more fundamental changes are required; changes involving the whole of current business designs.

The business design concept contains assumptions about consumer behavior and the selection process concerning what clients to serve. It also addresses questions on the configuration and sourcing of resources, both internally and externally. This business design concept relates to the process of conducting business, without automatically focusing on a single firm. Business design is about entrepreneurship in a networked society, within the framework of a wide range of economic relationships, some of which have only recently emerged.

This book, Nolan, Norton & Co.'s second Annual, identifies the concept of business design, discusses it to reach an understanding of what is happening, and investigates the related implications for strategy development and new operating logic. After considering strategic options and possible business designs for a number of specific industries, the resulting implications are addressed with regard to the topics of leadership, business model migration, change management, the role of ICT in corporate strategy and management and the issue of governance.