What is Business Development?
In the least difficult terms, business advancement can be compressed as the thoughts, activities and exercises pointed towards improving a business. This incorporates expanding incomes, development regarding business extension, expanding productivity by building vital organizations, and settling on key business choices. Be that as it may, it’s trying to come down the meaning of business advancement. Initially, we should take a gander at the hidden idea, and how it associates with the general business targets.
For instance, a business has a product/service which is successful in one region (say, the United States). The business development team assesses further expansion potential. After all due diligence, research and studies, it finds that the product/service can be expanded to a new region (like Brazil). Let’s understand how this business development goal can be tied to the various functions and departments:
- Sales: Sales personnel focus on a particular market or a particular (set of) client(s), often for a targeted revenue number. In this case, business development assesses the Brazilian markets and concludes that sales worth $1.5 billion can be achieved in three years. With such set goals, the sales department targets the customer base in the new market with their sales strategies.
- Marketing: Marketing involves promotion and advertising aimed towards the successful sale of products to the end-customers. Marketing plays a complementary role in achieving the sales targets. Business development initiatives may allocate an estimated marketing budget. Higher budgets allow aggressive marketing strategies like cold-calling, personal visits, road shows, and free sample distribution. Lower budgets tend to result in passive marketing strategies, such as limited print and media ads, and billboards.
- Strategic Initiatives or Partnerships: To enter a new market, will it be worth going solo by clearing all required formalities, or will it be more pragmatic to strategically partner with local firms already operating in the region? Assisted by legal and finance teams, the business development team weighs all the pros and cons of the available options, and selects which one best serves the business.
- Project Management/Business Planning: Does the business expansion requires a new facility in the new market, or will all the products be manufactured in the base country and then imported into the targeted market? Will the latter option require an additional facility in the base country? Such decisions are finalized by the business development team based on their cost-, time- and related assessments. Then project management/implementation team swings into action to work towards the desired goal.
- Product Management: Regulatory standards and market requirements vary across countries. A medicine of a certain composition may be allowed in India but not in the U.K., for example. Does the new market requires any customized (or altogether new) version of the product? These requirements drive the work of product management and manufacturing departments, as decided by the business strategy. Cost consideration, legal approvals and regulatory adherence are all assessed as a part of a business development plan.
- Vendor Management: Will the new business need external vendors? For example, will shipping of product need a dedicated courier service? Or will the firm partner with any established retail chain for retail sales? What are the costs associated with these engagements? The business development team works through these questions.Read More : 5 STEPS TO LAUNCHING A SUCCESSFUL BUSINESS ECOMMERCE
- Negotiations, Networking and Lobbying: A few business initiatives may need expertise in soft skills. For example, lobbying is legal in some locales, and may become necessary for penetrating the market. Other soft-skills like networking and negotiating may be needed with different third-parties such as vendors, agencies, government authorities, and regulators. All such initiatives are part of business development.
- Cost Savings: Business development is not just about increasing sales, products and market reach. Strategic decisions are also needed to improve the bottom line, which include cost-cutting measures. An internal assessment revealing high spending on travel, for instance, may lead to travel policy changes, such as hosting video conference calls instead of on-site meetings, or opting for less expensive transportation modes.