Business development
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A subset of the field of commerce, business development comprises a number of techniques and responsibilities which aim at:
1. Researching new types of business/products/services with an emphasis on identifying gaps (existing and/or expected) in the mitigation of needs of potential clients (existing and/or new ones).
2. Attracting new customers
3. Penetrating existing markets.
4. Creating new markets.
Techniques used include:
- intelligence gathering on customers and competitors
- generating leads for possible sales
- advising on, drafting and enforcing sales policies and processes
- follow-up sales activity
- formal proposal and presentation management and writing
- pitch and presentation rehearsals
- business model design
- strategic analysis
- championing of research and development within the firm, to encourage innovations that could lead to new business opportunities
- monitoring of research and development throughout an industry (to the extent knowable from outside particular firms), in order to detect and appreciate others' innovations earlier than competitors do
- account planning and performance monitoring system
- proposition development and campaign development
Business development involves evaluating a business and then realizing its full potential, using such tools as:
- marketing
- information management (sometimes conflated with knowledge management)
- customer service
Business development is often related to growth although sometimes the optimal marketing strategy and objectives could be about downsizing the activity in an existing market or decreasing the sales volume of a selected line of products or services. Business-development roles may have one of two modes:
- sales-oriented (client-facing); or
- an operational function to support sales.
In a sales role, business development could concentrate on developing strategic-channel relationships or on general sales. This emerges from analysis of the varied job descriptions found in job-search engines, especially in the UK. In the US, the term "capture management" appears as an alternative job or role title, typically used when describing business development as an operational function to support the selling function of a company. The Association of Proposal Management Professionals have produced the "Capture Management Lifecycle" that describes the process in three broad stages:
- Pre-bid phase
- Bid phase
- Post-bid phase
Small to medium-sized companies often do not establish procedures for business development, instead relying on their existing contacts. Or people in such companies may assume that because they know people in high places that this will solve any business-development problems and that somehow new financial transactions will come to them. Such thinking can have significant ramifications if one cannot exploit those relationships, which very often[citation needed] remain personal or weak. Such a situation may result in no new sales in the pipeline.
[edit] Impact on Global Economy
Business Development professionals frequently have had earlier experience in financial services, investment banking or management consulting; although many find their route to this area by climbing the corporate ladder in functions such as operations management or sales. Skill sets and experience for business-development specialists usually consist of a mixture of the following (depending on the business requirements):
The "pipeline" refers to flow of potential clients which a company has started developing. Business-development staff assign to each potential client in the pipeline a percent chance of success, with projected sales-volumes attached. Planners can use the weighted average of all the potential clients in the pipeline to project staffing to manage the new activity when finalized. Enterprises usually support pipelines with some kind of C.R.M. (customer relationship management) tool or CRM-database, either web-based (such as the www.salesforce.com software-as-a-service solution) or an in-house system. Sometimes business development specialists manage and analyze the data to produce sales management information (MI). Such MI could include:
- reasons for wins/losses
- progress of opportunities in relation to the sales process
- top performing sales people/sales channels
- sales of services/products
For larger and well-established companies, especially in technology-related industries, the term "business development" often refers to setting up and managing strategic relationships and alliances with other, third-party companies. In these instances the companies may leverage each others' expertise, technologies or other intellectual property to expand their capacities for identifying, researching, analyzing and bringing to market new businesses and new products, business-development focuses on implementation of the strategic business plan through equity financing, acquisition/divestiture of technologies, products, and companies, plus the establishment of strategic partnerships where appropriate.
