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THE BASICS OF
BUSINESS DEVELOPMENT
General GuideTo
Business Development
By: Moatasem Mabrouk
2015
1
CONTENT
Introduction
Definitions
Terms
Business Process Management
Business Process Modeling
Sales vs. Business Development
Business Development Strategies [Growth Strategies]
TIPS on HowWillYou Grow?
References
2
INTRODUCTION
Business Development (BD) Defined as the tasks and processes concerning analytical preparation of potential
growth opportunities, and the support and monitoring of the implementation of growth opportunities, but does not
include decisions on strategy and implementation of growth opportunities.
Recent systematic researches on the subject has outlined the contours of an emerging business development
function with a unique role in the innovation management process.
Business development is the business unit within an organization that works to create long term growth and
profitability through three main activities. These activities include, but are not limited to, creating meaningful
partnerships, establishing business in new markets and increasing the value of a current customer base.
Business Development, is a mix of sales, marketing, negotiations, networking, project management and contract
review.
3
DEFINITIONS
Business is an organization involved in the trade of
goods, services, or both to consumers.
Management The efficient and effective operation of a
business, and study of this subject, is called
management.
Entrepreneurship is the process of starting a business, a
startup company or other organization. The
entrepreneur develops a business plan, acquires the
human and other required resources, and is fully
responsible for its success or failure.
Entrepreneur is a loanword from French. It is defined as
an individual who organizes or operates a business or
businesses.
Entrepreneurship Ecosystem, refers to the elements
outside the individual entrepreneur that are conducive
to, or inhibitive of, the choice of a person to become an
entrepreneur, or the probabilities of his or her success
following launch.
Stakeholders are any entity that has an interest,
actually or potentially, in there being more
entrepreneurship in the region.
Business Administration is the process of managing a
business or non-profit organization, so that it remains
stable and continues to grow.The administration of a
business includes the performance or management of
business operations and decision making as well as the
efficient organization of people and other resources to
direct activities toward common goals and objectives.
Business Opportunity is a packaged business
investment that allows the buyer to begin a business.
4
TERMS
BD – Business Development
CRM – Customer Relationship Management
MI – Management Information
BPM – Business Process Management / Business Process Modeling
5
BUSINESS PROCESS MANAGEMENT
BUSINESS PROCESS MANAGEMENT LIFE CYCLE
Business Prospective
Design
Modeling
Execution
Monitoring
Optimization
Quality Management Prospective
6
Plan
DoCheck
Act
Continual
Improvement
BUSINESS PROCESS MODELING
Business process modeling (BPM): in systems engineering is the activity of representing processes of an
enterprise, so that the current process may be analyzed or improved. BPM is typically performed by business
analysts, who provide expertise in the modeling discipline; by subject matter experts, who have specialized
knowledge of the processes being modeled; or more commonly by a team comprising both. The business
objective is often to increase process speed or reduce cycle time; to increase quality; or to reduce costs, such as
labor, materials, scrap, or capital costs.
7
SALES VS. BUSINESS DEVELOPMENT
Business Development
works to produce long-term growth and profitability
using three primary activities. They consist of, but are
not necessarily limited to, establishing business in new
markets, generating significant partnerships, and
improving the current customer base.
Successful business development involves a mix of
negotiations, marketing, project management, sales,
networking, and reviewing contracts.
Essentially, business development determines how
much a business will grow, where that growth will come
from, and what approach is needed to attain that
growth.
Sales Development
is the formalization of how a sales team influences
customers with their services and products.
This includes ensuring the method used to contact
prospective clients or customers is effective and cost-
efficient for producing long-term clients or customers.
In simple terms, sales development is responsible for
creating a relationship with customers in order to align
them with your products or services.
8
SALES VS. BUSINESS DEVELOPMENT
Sales Development
Customer
Customer
Customer
Customer
Business Development
Partner
• Customer
• Customer
Partner
• Customer
• Customer
Partner
• Customer
• Customer
Partner
• Customer
• Customer
9
SALES VS. BUSINESS DEVELOPMENT
Business Development Strategies and Goals
Essentially, when developing a business strategy, it is
important to remember that the primary goal is to build
partnerships that allow leverage for driving revenue. In
effect, it should thoroughly explain the company’s
short-term and long-term goals and how they can be
achieved.
Additionally, it should include a description of the
company, management organization chart, an
explanation of your services or products, a look at the
market and your competitors, financial information, and
a marketing and sales plan.
Goals commonly seen in business development plan
include new user acquisition, brand placement, brand
awareness, and market expansion.
Sales Development Strategies
When developing a sales strategy, there are several
important elements to consider.
Firstly, it is important to determine whether your
company can execute the plan independently, how
much it will cost to execute, how long it will take to see
results, whether or not you have the necessary
resources, and how the results can be measured.
Keep in mind that the main function of sales is to sell
directly to the customer.
Therefore, your goal is to close as many sales as
possible.
10
SALES VS. BUSINESS DEVELOPMENT
How Business Development & Sales Intersect
While business development is the creation, focus, and measurement of a plan, sales development involves the
actual execution. Business development works with partners to sell to customers in a way that can be measured,
whereas sales are simply the process of converting leads into customers.
In order for a company to have high sales, it is imperative that your business development plan be well written and
implemented.
In summary, business development requires a thorough examination of your current target market and sales
channels, in an effort to reach new partners and customers. However, sales development is the act of closing a
sale.
While a good business development strategy is essential to effective sales development, it’s important to
remember the distinction between the two.
11
Quotes
Most Businesses Start Small And StayThere,
Staying Small Doesn't Necessarily Guarantee Business's Survival,
There Are Examples Of Companies Out There That Have Successfully Made The Transition From Start-up To Small
Business To Fully-thriving Large Business,
Keith McFarland, an entrepreneur and former Inc. 500 CEO said “There has always been lots of books out there on
how to run a big company but I couldn't find one about how to maintain fast-growth over the long-term. So I studied
the companies who had done it to learn their lessons."
12
GROWTH STRATEGIES
13
Growth
Strategy
Intensive
Integrative
Diversification
GROWTH STRATEGIES
IntensiveGrowth Strategies
Part of getting from A to B, then, is to put together a growth
strategy that, brings the most results from the least amount of
risk and effort. Growth strategies resemble a kind of ladder,
where lower-level rungs present less risk but maybe less quick-
growth impact. The bottom line for small businesses, especially
start-ups, is to focus on those strategies that are at the lowest
rungs of the ladder and then gradually move your way up as
needed. Each new rung brings more opportunities for fast
growth, but also more risk.They are:
1. Market Penetration. The least risky growth strategy for any
business is to simply sell more of its current product to its
current customers.
2. Market Development. The next rung up the ladder is to devise
a way to sell more of your current product to an adjacent
market.
3. Alternative Channels. This growth strategy involves pursuing
customers in a different way such as, for example, selling your
products online.
4.Product Development. A classic strategy, it involves
developing new products to sell to your existing customers as
well as to new ones. Selling new products to existing
customers is far less risky than having to learn a new product
and market at the same time.
5. New Products for New Customers. Sometimes, market
conditions dictate that you must create new products for new
customers, as Polaris, the recreational vehicle manufacturer in
Minneapolis found out. For years, the company produced only
snowmobiles. Then, after several mild winters, the company
was in dire straits. Fortunately, it developed a wildly-successful
series of four-wheel all-terrain vehicles. the iPhone has had a
similar impact; once customers began to enjoy the look and
feel of the product's interface, they opened themselves up to
buying other Apple products.
Choosing to follow one of the Intensive Growth Strategies,
should be ideally by taking only one step up the ladder at a time,
since each step brings risk, uncertainty, and effort.
14
GROWTH STRATEGIES
Integrative Growth Strategies
After exhausted all steps along the Intensive Growth Strategy
path, consider growth through acquisition or Integrative
Growth Strategies can be considered. The problem is that some
75% of all acquisitions fail to deliver on the value or efficiencies
that were predicted for them. In some cases, a merger can end
in total disaster, as in the case of the AOL-Time Warner deal.
Nevertheless, there are three viable alternatives when it comes
to an implementing an Integrative Growth Strategy.They are:
1. Horizontal. This growth strategy would involve buying a
competing business or businesses. Employing such a
strategy not only adds to your company's growth, it also
eliminates another barrier standing in your way of future
growth, a real or potential competitor.
2. Backward. A backward integrative growth strategy would
involve buying one of your suppliers as a way to better
control your supply chain. Doing so could help developing
new products faster and potentially more cheaply. For
instance, Fastenal, a company based in Winona, Minnesota
that sells nuts and bolts (among other things), made the
decision to acquire several tool and die makers as a way to
introduce custom-part manufacturing capabilities to its
larger clients.
3. Forward. Acquisitions can also be focused on buying
component companies that are part of company’s
distribution chain. For instance, a garment manufacturer like
Chicos, which is based in Fort Myers, Florida, could begin
buying up retail stores as a means to pushing their product at
the expense of your competition.
15
GROWTH STRATEGIES
DiversificationGrowth Strategies
Another category of growth strategies that was popular in the 50’s and 60’s and is used far less often today is something called
diversification where you grow your company by buying another company that is completely unrelated to current business.
Massive conglomerates such as General Electric are essentially holding companies for a diverse range of businesses based solely
on their financial performance.
That's how GE could have a nuclear power division, a railcar manufacturing division and a financial services division all under the
letterhead of a single company. This kind of growth strategy tends to be fraught with risk and problems, and is rarely considered
viable these days.
16
TIPS ON HOW WILLYOU GROW?
Growth strategies are never pursued in a vacuum, and being willing to change course in
response to feedback from the market is as important as implementing a strategy in a single-
minded way.
Too often, companies take a year to develop a strategy and, by the time they're ready to
implement it, the market has changed on them. That's why, when putting together a growth
strategy, companies should think in just 90 chunks, a process called a Rapid Enterprise
Design.
Sometimes the best approach is to take it one rung at a time.
17
THANKYOU …
References
Handbook of Research onTechno-Entrepreneurship: HowTechnology and Entrepreneurship are Shaping the Development of Industries and Companies
The Palgrave Encyclopedia of Strategic Management (2014)
Business development capabilities in information technology SMEs in a regional economy: An exploratory study.
Human Interaction:The Missing Link in BPM (Part I)
Coupling BPM with Six Sigma
Business Process Optimization
Business process management (BPM)
Business Process Management (BPM) Service Pattern
1st InternationalWorkshop on Business Process Management in the Cloud
Difference Between Sales and Business Development
How to Develop a Business Growth Strategy
The Basics of Business Development
18

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Growth Strategies for Business Development

  • 1. THE BASICS OF BUSINESS DEVELOPMENT General GuideTo Business Development By: Moatasem Mabrouk 2015 1
  • 2. CONTENT Introduction Definitions Terms Business Process Management Business Process Modeling Sales vs. Business Development Business Development Strategies [Growth Strategies] TIPS on HowWillYou Grow? References 2
  • 3. INTRODUCTION Business Development (BD) Defined as the tasks and processes concerning analytical preparation of potential growth opportunities, and the support and monitoring of the implementation of growth opportunities, but does not include decisions on strategy and implementation of growth opportunities. Recent systematic researches on the subject has outlined the contours of an emerging business development function with a unique role in the innovation management process. Business development is the business unit within an organization that works to create long term growth and profitability through three main activities. These activities include, but are not limited to, creating meaningful partnerships, establishing business in new markets and increasing the value of a current customer base. Business Development, is a mix of sales, marketing, negotiations, networking, project management and contract review. 3
  • 4. DEFINITIONS Business is an organization involved in the trade of goods, services, or both to consumers. Management The efficient and effective operation of a business, and study of this subject, is called management. Entrepreneurship is the process of starting a business, a startup company or other organization. The entrepreneur develops a business plan, acquires the human and other required resources, and is fully responsible for its success or failure. Entrepreneur is a loanword from French. It is defined as an individual who organizes or operates a business or businesses. Entrepreneurship Ecosystem, refers to the elements outside the individual entrepreneur that are conducive to, or inhibitive of, the choice of a person to become an entrepreneur, or the probabilities of his or her success following launch. Stakeholders are any entity that has an interest, actually or potentially, in there being more entrepreneurship in the region. Business Administration is the process of managing a business or non-profit organization, so that it remains stable and continues to grow.The administration of a business includes the performance or management of business operations and decision making as well as the efficient organization of people and other resources to direct activities toward common goals and objectives. Business Opportunity is a packaged business investment that allows the buyer to begin a business. 4
  • 5. TERMS BD – Business Development CRM – Customer Relationship Management MI – Management Information BPM – Business Process Management / Business Process Modeling 5
  • 6. BUSINESS PROCESS MANAGEMENT BUSINESS PROCESS MANAGEMENT LIFE CYCLE Business Prospective Design Modeling Execution Monitoring Optimization Quality Management Prospective 6 Plan DoCheck Act Continual Improvement
  • 7. BUSINESS PROCESS MODELING Business process modeling (BPM): in systems engineering is the activity of representing processes of an enterprise, so that the current process may be analyzed or improved. BPM is typically performed by business analysts, who provide expertise in the modeling discipline; by subject matter experts, who have specialized knowledge of the processes being modeled; or more commonly by a team comprising both. The business objective is often to increase process speed or reduce cycle time; to increase quality; or to reduce costs, such as labor, materials, scrap, or capital costs. 7
  • 8. SALES VS. BUSINESS DEVELOPMENT Business Development works to produce long-term growth and profitability using three primary activities. They consist of, but are not necessarily limited to, establishing business in new markets, generating significant partnerships, and improving the current customer base. Successful business development involves a mix of negotiations, marketing, project management, sales, networking, and reviewing contracts. Essentially, business development determines how much a business will grow, where that growth will come from, and what approach is needed to attain that growth. Sales Development is the formalization of how a sales team influences customers with their services and products. This includes ensuring the method used to contact prospective clients or customers is effective and cost- efficient for producing long-term clients or customers. In simple terms, sales development is responsible for creating a relationship with customers in order to align them with your products or services. 8
  • 9. SALES VS. BUSINESS DEVELOPMENT Sales Development Customer Customer Customer Customer Business Development Partner • Customer • Customer Partner • Customer • Customer Partner • Customer • Customer Partner • Customer • Customer 9
  • 10. SALES VS. BUSINESS DEVELOPMENT Business Development Strategies and Goals Essentially, when developing a business strategy, it is important to remember that the primary goal is to build partnerships that allow leverage for driving revenue. In effect, it should thoroughly explain the company’s short-term and long-term goals and how they can be achieved. Additionally, it should include a description of the company, management organization chart, an explanation of your services or products, a look at the market and your competitors, financial information, and a marketing and sales plan. Goals commonly seen in business development plan include new user acquisition, brand placement, brand awareness, and market expansion. Sales Development Strategies When developing a sales strategy, there are several important elements to consider. Firstly, it is important to determine whether your company can execute the plan independently, how much it will cost to execute, how long it will take to see results, whether or not you have the necessary resources, and how the results can be measured. Keep in mind that the main function of sales is to sell directly to the customer. Therefore, your goal is to close as many sales as possible. 10
  • 11. SALES VS. BUSINESS DEVELOPMENT How Business Development & Sales Intersect While business development is the creation, focus, and measurement of a plan, sales development involves the actual execution. Business development works with partners to sell to customers in a way that can be measured, whereas sales are simply the process of converting leads into customers. In order for a company to have high sales, it is imperative that your business development plan be well written and implemented. In summary, business development requires a thorough examination of your current target market and sales channels, in an effort to reach new partners and customers. However, sales development is the act of closing a sale. While a good business development strategy is essential to effective sales development, it’s important to remember the distinction between the two. 11
  • 12. Quotes Most Businesses Start Small And StayThere, Staying Small Doesn't Necessarily Guarantee Business's Survival, There Are Examples Of Companies Out There That Have Successfully Made The Transition From Start-up To Small Business To Fully-thriving Large Business, Keith McFarland, an entrepreneur and former Inc. 500 CEO said “There has always been lots of books out there on how to run a big company but I couldn't find one about how to maintain fast-growth over the long-term. So I studied the companies who had done it to learn their lessons." 12
  • 14. GROWTH STRATEGIES IntensiveGrowth Strategies Part of getting from A to B, then, is to put together a growth strategy that, brings the most results from the least amount of risk and effort. Growth strategies resemble a kind of ladder, where lower-level rungs present less risk but maybe less quick- growth impact. The bottom line for small businesses, especially start-ups, is to focus on those strategies that are at the lowest rungs of the ladder and then gradually move your way up as needed. Each new rung brings more opportunities for fast growth, but also more risk.They are: 1. Market Penetration. The least risky growth strategy for any business is to simply sell more of its current product to its current customers. 2. Market Development. The next rung up the ladder is to devise a way to sell more of your current product to an adjacent market. 3. Alternative Channels. This growth strategy involves pursuing customers in a different way such as, for example, selling your products online. 4.Product Development. A classic strategy, it involves developing new products to sell to your existing customers as well as to new ones. Selling new products to existing customers is far less risky than having to learn a new product and market at the same time. 5. New Products for New Customers. Sometimes, market conditions dictate that you must create new products for new customers, as Polaris, the recreational vehicle manufacturer in Minneapolis found out. For years, the company produced only snowmobiles. Then, after several mild winters, the company was in dire straits. Fortunately, it developed a wildly-successful series of four-wheel all-terrain vehicles. the iPhone has had a similar impact; once customers began to enjoy the look and feel of the product's interface, they opened themselves up to buying other Apple products. Choosing to follow one of the Intensive Growth Strategies, should be ideally by taking only one step up the ladder at a time, since each step brings risk, uncertainty, and effort. 14
  • 15. GROWTH STRATEGIES Integrative Growth Strategies After exhausted all steps along the Intensive Growth Strategy path, consider growth through acquisition or Integrative Growth Strategies can be considered. The problem is that some 75% of all acquisitions fail to deliver on the value or efficiencies that were predicted for them. In some cases, a merger can end in total disaster, as in the case of the AOL-Time Warner deal. Nevertheless, there are three viable alternatives when it comes to an implementing an Integrative Growth Strategy.They are: 1. Horizontal. This growth strategy would involve buying a competing business or businesses. Employing such a strategy not only adds to your company's growth, it also eliminates another barrier standing in your way of future growth, a real or potential competitor. 2. Backward. A backward integrative growth strategy would involve buying one of your suppliers as a way to better control your supply chain. Doing so could help developing new products faster and potentially more cheaply. For instance, Fastenal, a company based in Winona, Minnesota that sells nuts and bolts (among other things), made the decision to acquire several tool and die makers as a way to introduce custom-part manufacturing capabilities to its larger clients. 3. Forward. Acquisitions can also be focused on buying component companies that are part of company’s distribution chain. For instance, a garment manufacturer like Chicos, which is based in Fort Myers, Florida, could begin buying up retail stores as a means to pushing their product at the expense of your competition. 15
  • 16. GROWTH STRATEGIES DiversificationGrowth Strategies Another category of growth strategies that was popular in the 50’s and 60’s and is used far less often today is something called diversification where you grow your company by buying another company that is completely unrelated to current business. Massive conglomerates such as General Electric are essentially holding companies for a diverse range of businesses based solely on their financial performance. That's how GE could have a nuclear power division, a railcar manufacturing division and a financial services division all under the letterhead of a single company. This kind of growth strategy tends to be fraught with risk and problems, and is rarely considered viable these days. 16
  • 17. TIPS ON HOW WILLYOU GROW? Growth strategies are never pursued in a vacuum, and being willing to change course in response to feedback from the market is as important as implementing a strategy in a single- minded way. Too often, companies take a year to develop a strategy and, by the time they're ready to implement it, the market has changed on them. That's why, when putting together a growth strategy, companies should think in just 90 chunks, a process called a Rapid Enterprise Design. Sometimes the best approach is to take it one rung at a time. 17
  • 18. THANKYOU … References Handbook of Research onTechno-Entrepreneurship: HowTechnology and Entrepreneurship are Shaping the Development of Industries and Companies The Palgrave Encyclopedia of Strategic Management (2014) Business development capabilities in information technology SMEs in a regional economy: An exploratory study. Human Interaction:The Missing Link in BPM (Part I) Coupling BPM with Six Sigma Business Process Optimization Business process management (BPM) Business Process Management (BPM) Service Pattern 1st InternationalWorkshop on Business Process Management in the Cloud Difference Between Sales and Business Development How to Develop a Business Growth Strategy The Basics of Business Development 18