Business Development Framework
To get from an idea down to volume production is a long way, don’t miss out important steps to have a successful launch.
The framework gives you a guideline to walk down the stony road into volume production.
2. 2
Business Development Framework – seven steps to a
successful volume production
Business Development Framework
Phase
One
Phase
Two
Phase
Three
Phase
Four
Phase
Five
Phase
Six
Phase
Seven
Opportunity
Identification
Opportunity
Evaluation
Opportunity
Development
Detailed
Development and
Pre- Negotiations
Scale up and
Definitive
Agreements
Implementation and
Commercialization
Commercial
Operation
Market
Screening
Market Assessment
Business
Case Team
Feasibilty and
Assessment
Business
Plan Team
Alliance Assessment
Partner Selection
Marketing Plan
Negotiating Preliminary
Agreement negotiations
Engineering / Product /
Process Concept
CACO / GLM Resources
RASIC / GM / Directors
Government negotiations
Definitive Agreement
negotiations
Operation / Service
Concept
Business Plan
Product process
development and
demonstration
Test Market evaluation Business Formation and
Start up
Business Case Go / - or No Go Decision
Operations and
Manufacturing Facility
Panning
Product / Process
optimization
Marketing Plan
implementation
Go / - or No Go Decision Final Market planning
Manufacturing Project
Planning and Basic
Design
Market Launch Event
Ongoing Delivery of
Products and Services
BusinessDevelopmentSteps
Operations and
Manufacturing Capability
development
Commercial Facility
Construction & Start up
Continuous Improvement
3. 3
Opportunity
Identification
Opportunity
Evaluation
Implementation
and Commercialization
Commercial
Operation
Scale Up and
Definitive Agreements
Business Development Process describes the main phases from the business idea to a
successful market launch.
High Investment / High Risk Fields
Decision have high financial impact
Low Investment / Low Risk Fields
Decision have low financial impact
Detailed Development
and Pre - Negotiations
Opportunity
Development
Business Development Framework Phase one Phase seven
Phase
One
Phase
Two
Phase
Three
Phase
Four
Phase
Five
Phase
Six
Phase
Seven
Opportunity
Identification
Opportunity
Evaluation
Opportunity
Development
Detailed
Development and
Pre- Negotiations
Scale up and
Definitive
Agreements
Implementation and
Commercialization
Commercial
Operation
Market
Screening
Market Assessment
Business
Case Team
Feasibilty and
Assessment
Business
Plan Team
Alliance Assessment
Partner Selection
Marketing Plan
Negotiating Preliminary
Agreement negotiations
Engineering / Product /
Process Concept
CACO / GLM Resources
RASIC / GM / Directors
Government negotiations
Definitive Agreement
negotiations
Operation / Service
Concept
Business Plan
Product process
development and
demonstration
Test Market evaluation Business Formation and
Start up
Business Case Go / - or No Go Decision
Operations and
Manufacturing Facility
Panning
Product / Process
optimization
Marketing Plan
implementation
Go / - or No Go Decision Final Market planning
Manufacturing Project
Planning and Basic
Design
Market Launch Event
Ongoing Delivery of
Products and Services
BusinessDevelopmentSteps
Operations and
Manufacturing Capability
development
Commercial Facility
Construction & Start up
Continuous Improvement
The business development process
describes the seven main
phases from an business idea to a
successful market launch
The business Development
Framework describe the single
steps which have to be performed
to move from phase one down to
phase seven
Business Development Framework
5. 5
Market Screening
•Internet
•Industrial contacts
•Industrial reports
•Exhibitions
•Conferences
•Universities
•Industrial experts
Market Assessment
•Market dynamics
•Market segmentation
•Competitor benchmark
•Own competitive position
•Strategic Fit
BusinessDevelopmentSteps
Opportunity
Identification
Opportunity
Evaluation
Opportunity
Development
Detailed Development
Pre- Negotiations
Definition of
Market potentials /
target customers
Value
Proposition
Strategic Fit
to overall
Corporate Strategy
The GBD process must define and identify potential opportunities
for new business development strategies and assess their fit with the
overall strategic direction of the business. “ Strategic Fit”
If the opportunity is in a first instance promising a go decision by
the company will open the phase two of the business development process
The next step is the Opportunity Evaluation:
Once an opportunity has been identified it has to be evaluated from
different perspective , which results in a business case for the Business
Development activity.
Phase one: Opportunity Identification
7. 7
Business Case
Business
Case Team
Feasibility and
Assessment
Alliance Assessment
Partner Selection
Engineering / Product /
Process Concept
Operations / Service
Concepts
GO / or NO GO
Decision
BusinessDevelopmentSteps
Opportunity
Identification
Opportunity
Evaluation
Opportunity
Development
Detailed Development
Pre- Negotiations
Phase two: Opportunity Evaluation
Primary Objective of Phase Two
The primary objectives of phase two:
“Opportunity Evaluation” ; is to fully assess
the opportunity , evaluate alternatives,
select the preferred business strategy, and
validate the essential feasibility of the
project.
The focus of the development team is to
gather data and develop detailed plans
based on an in-depth analysis of that data.
This phase is all about developing and
putting all information together to create a
business case, which is basis
for a GO / or NO GO decision.
8. 8
Phase two: actions required
Business Case Team
A small team typically 2 – 4 persons build such a multifunctional business case team
responsible for managing a specific business growth development project, and including
appropriate people from internal and sometimes external partners, if you don’t have the
specific know how inside the company.
Feasibility Study and Assessment
The purpose of this step is to define the new business opportunity, using a feasibility study
and strategic gaps analysis as key inputs. The gap analysis compares our current capabilities
with that what it takes to be successful , and out of that we can prioritize key strategic needs.
The feasibility study is a analysis of information collected in the steps, Market Potentials,
Value Proposition, Business Model and Business Development Plan.
From this analysis, the team develops a recommended business model and a prioritized list of
alternative strategies, which includes also the option from organic growth up to the complex
approach of acquisition.
Very often companies try to close the capabilities gap via alliances or partnerships,
therefore in new business development this strategic option plays a significant role to create a
winning scenario on a short term schedule, which is discussed on following slides.
9. 9
Alliance Assessment and Partner Selection
One of the most common approaches to closing capability gaps is to form an alliance with
another organization that has the missing pieces. GBD by its very nature takes a business
into new areas, and the time and resources to fill all gaps internally is often perceived as
prohibitive.
Partnering then becomes sometimes the only viable option and at this point the critical
issue becomes selecting the right alliance option and the “best” partner.
As a first step teams should explore the full alliance landscape , next slide before finalizing
a strategy and selecting a preferred partner.
Too often a team will start with the assumption that one particular partnering framework
frequently an equity joint venture is the “only way to go” and won’t look at alternatives.
Often it turns out that a less complex alternative can be effectively structured to meet the
needs.
After an alliance option is selected, the development team is facilitated through a partner
identification and evaluation process which can be understand as a sort of “strategic due
diligence.” The goal is to identify potential partners and develop sufficient information about
their strengths / weaknesses and competitive position to allow the team to select the
preferred partner(s) and viable alternatives for the next phase.
Phase two: actions required
10. 10
Merger
or
Acquisition
Joint Venture
Minority Holding
Contractual Alliance
Consortium
Informal Alliance / Partnership
IncreasingComplexityofCooperation
BUSINESS DEVELOPMENT by its nature takes
a business into new areas, and the time and
resources to fill all gaps internally is often
perceived as prohibitive .
One of the most common approaches to closing
capability gaps is to form an alliance with
another organization that has the missing
pieces.
Partnering then becomes the only viable option
and at this point the critical issue becomes
selecting the right alliance option and the “best”
partner.
The landscape of
options
Phase two: actions required
11. 11
Engineering / Product and Process Concept
Concurrent with partner evaluation / selection, the team will fully “define” the products /
services to be provided and the manufacturing processes that will produce them.
The objective is to give clarity to and to bring in the necessary specifications to outline the
hard facts in the Business Case:
• Technology Approach
• Commercial Manufacturing and Operations Concept
• Supply Chain Strategy
• Program Organization
• Resources, Plan and Schedule
Phase two: actions required
12. 12
Operations and Service Concepts
The output from this step is an integrated broad-brush picture of how the business will
operate when fully commercialized.
• How will product components be sourced?
• Which manufacturing plants will be used?
• How will distribution be handled?
• How will customers be serviced?
• Which administrative activities will be done in-house vs. outsourced, etc.?
This picture will complete the “Business Model” , which is an important step to finalize
the Business Case.
Business Model
Business Model—Identify potential business strategies; explore, as
appropriate, technology protection, country issues, infrastructure, entry
barriers, legal restrictions, etc.
How do we plan to organize/ structure the pieces of the enterprise to develop–
produce–support–deliver your value proposition to your target customers?
Phase two: actions required
13. 13
Phase two: Business case keeping all together
Definition of Market potentials /
target customers
Value Proposition
Program Objectives and
Criteria for success
Business Model
Business Case
Target Customers— Market Potentials
Who are the organizations/ individuals we are
targeting to purchase our product/ service?
Identify the end-user and the people who control
the direct buy decision for our product/service:
assess the entire value chain down to the end
user.
Value Proposition
What is the “value” we are offering our target
customers that they will be willing and eager to pay
for?
Capture what differentiates our offering from our
competitors: what is it that customers are “buying”
from us that they cannot get elsewhere?
Program Objectives and Criteria for Success
What are the goals/targets for the program in terms of scale, market
penetration, growth rate, competitive position, etc?
Business Model: Identify potential business strategies; explore, as
appropriate, technology protection, country issues, infrastructure, entry
barriers, legal restrictions, etc.
How do you plan to organize/ structure the pieces of the enterprise to develop–
produce–support–deliver your value proposition to your target customers?
Business
Development
Plan
Business Development Plan—Show a view of the work required to build /
establish an ongoing business based on an assessment of the capabilities
currently in place vs. capabilities required to win in the marketplace: “strategic
gaps analysis”
Business Case—Describe how the business will “make money” with
this GBD initiative and is basis for Go or No-Go Decision
14. 14
Summarizing and finishing the business case
The complete business case is basis for Go / or No Go decision by the management.
Based on this knowledge , a business plan team is created that can begin to identify the
issues that need clarification and will validate their vision of the future and their path to
meeting the business goals.
Phase two: Business case keeping all together
16. 16
BusinessDevelopmentSteps
Marketing Plan
Business
Plan Team
CACO / GLM
Resources
RASIC / GM / Directors
Business Plan
GO / or NO GO
Decision
Opportunity
Development
Detailed Development
Pre- Negotiations
Business Plan Team
Different to the business case team , which is a normally a smaller
team typically 2-4 members the business plan team is a
multifunctional team, which all the specific technical experts ,
which are necessary to manage a specific business growth
development project.
The core of this teams is formed at this stage the goal of staying
together from concept development through full commercialization.
The size of the team for sure depends on the complexity of the
project , the investment volume, concept assessment, quick
overview of the business case or deep study due to
commercialization which incubates a own production facility or a
alliance or a acquisition.
Phase three: Opportunity Development
17. 17
Market Preparations
A preliminary Business case developed in phase one and phase two is basis to
build with the Marketing and Sales department a Marketing plan for the
marketplace.
Information is gained through direct interactions with the marketplace via
preliminary market testing of prototype products with potential customers or at
exhibitions or customer work shops, which helps to communicate the win – win
situation for our product or services.
In addition, more in-depth third-party market research can be carried out to
augment the earlier internal market assessment effort. The goal is to develop
sufficient information to enable the team to complete a final marketing plan.
Phase three: Marketing Plan
18. 18
Business plan is created and basis for Top Management for GO / or NO GO Decision to
step into phase four, therefore it should contain:
Phase three: Final Business Plan
1. Executive Summary
2. Opportunity and Business Development Strategy
• Includes partnering concepts / options
3. Market Definition and Marketing Approach
4. Technology Approach
5. Commercial Manufacturing and Operations Description
• Includes overview of full range business process / systems
• Describes facilities needed and planned rental or construction activities
6. Supply Chain strategy
7. Safety Health and environmental impact / strategy
8. Legal and regulation requirements
• Includes governmental approval process
9. Program Organization, Resources, Plan and Schedule
10. Financial projections
11. Major Issues, Risk and assumptions
Very often GM or Directors take over the responsibilities of the next steps and
are the main drivers for the phases four down to seven.
20. 20
Detailed Development and Preliminary Negotiations
This phase takes the plans and concepts built during phase one , phase two and phase
three and begins putting them into action both externally and internally.
While the first three phases were essentially “paper exercises” for the core
team, this phase requires them to do work “on the ground.”
Specific tasks include launching and completing the preliminary negotiations with
preferred partner(s ), developing/ testing prototypes, and validating / finalizing product
and process specifications and the marketing plan. The overall objective is to validate /
upgrade the underlying fundamentals of the project through prototyping and external
testing, and to develop confidence that the basic assumptions behind the project are
valid.
Phase four
21. 21
Negotiating Preliminary Agreements
After senior management has approved moving to this phase, the core team can
begin negotiations with potential alliance partners. The first step is to establish a
formal negotiating team , which is distinct from the core team to develop and execute
the negotiating strategy.
How to structure and manage this team. Key points include:
• Select a leader and build a negotiating team that is broad-based, multi-
functional and has players experienced in negotiating as well as in the
business.
• Clearly define the “negotiating box” up front.
• Create a small senior management “Direction Team” to provide ongoing
direction and rapid response to the negotiating team and to review / approve
general terms of preliminary agreements.
Hold structured negotiating team planning meetings before and after each negotiating
session
Phase four
22. 22
Develop a written negotiating strategy that is revisited before and after each
negotiation session.
The goal in this stage of negotiations is to reach agreement on the general plan
for the joint project and formalize that agreement (e.g., a letter of intent or
memorandum of understanding) . The LOI / MOU could include such items as
percentage ownership, makeup of equity contributions, technology to be
transferred, management control, project scope, etc.
This agreement provides the foundation for negotiating final binding agreements,
which will spell out the details of the alliance and the implementation plan for the
joint effort.
Phase four: Negotiation Preliminary Agreements
23. 23
Phase four: Planning Product, Process and Facility
Product and Process Development and Demonstration
This step is aimed at demonstrating the preferred product and manufacturing process
using prototype or full-scale production equipment. This will provide both key data and
prototype products to help finalize product and process specifications. In addition, this
step will provide process flow diagrams and the final basic data for
designing full-scale manufacturing facilities.
Operations and Facility Planning
This step takes the conceptual framework developed earlier and begins a detailed
build-out of the designs / plans for the facilities and operational capabilities needed to
support full commercialization. These designs / plans are broken down into specific
areas to cover the full range of supporting infrastructure needed, including
manufacturing and distribution facilities, supply chain support, logistic support,
information systems, and operational staffing.
The goal of this step to provide overall requirements for the design, operation and
maintenance of all the facilities and operational capabilities of the full business.
The outputs include cost estimates, identified suppliers, and development and
operations/manufacturing plans.
24. 24
Phase four: Final Marketing Plan
1. Product / offering description
2. Product offering positioning
3. Target market segments
4. Target customers ( direct and indirect)
5. Customer advantages for new product offering
6. Competitive position
7. Preliminary marketing communication plan
8. Pricing strategy
9. Price and volume forecast
10. Product / offering launch and ramp up plan
11. Marketing resource requirements
12. Financial analysis / ROI / EBIT
The final Marketing Plan builds on the experience out phase one down to phase four and
will be revised and updated due to new findings, even the frame stays the same to have
an comparison to previous planning's, therefore it should content:
26. 26
Scale-Up and Definitive Agreements
This phase is devoted to completing all of the critical design and ground-laying
elements of the project in preparation for full implementation. At the end of this
phase, everything should be in place—final agreements with partners, critical
facilities and equipment layout / design, key staffing, etc.—so that facilities
construction and the other elements of project implementation go smoothly.
This is typically the last opportunity to “tune” the business model, modify
basic plant design or stop the project before binding commitments to partners and
major capital expenditures are made.
Phase five
27. 27
Definitive Agreements Alliance - Negotiations
The negotiating team needs to converge on specific agreements with the partner(s) that will
govern their ongoing relationship. The definitive agreements should spell out in appropriate
detail (relative to the complexity of the alliance) the responsibilities , roles, contributions ,
and ownership of all parties.
In addition, a divorce clause must be part of the package to ensure that the company
interests are protected if / when the alliance folds. These “definitive agreements” can be
quite comprehensive and in a number of situations require multiple stand-alone
agreements.
An additional task here is for the partners to agree on a transition plan—i.e., a step-by-step
plan to create a business that will be in a position to operate profitably (including a plan to
keep the affected ongoing operations running while the transition takes place).
This is particularly important for joint ventures where a brand new legal entity is created.
This process is detailed and unglamorous (the excitement being all in “doing the deal”) and
often short-changed, but it is critically important and can make or break an Business
development effort.
Phase five
28. 28
Due Diligence part of Definitive Agreements – Negotiations
This activity, like transition planning, is often seen as unglamorous, overly detailed and
even tedious. But like particularly a major equity joint venture that merges assets and
resources. Due diligence is aimed at validating the credibility of the data provided by
the partner upon which the value of the business was determined.
Dedicated due diligence teams use detailed checklists covering areas like facilities,
human resources, supply chain, technology, safety/health/environment, information
systems , and management structure.
Once completed, this due diligence effort will help the project team understand in
depth the assets, people, culture, and working processes that the partner(s) will bring
to the alliance. These are key data for finalizing agreements and the transition plan.
Phase five
29. 29
Test Market Evaluation
Key pieces of the detailed marketing plan that was developed in the previous phase
are put into action here.
Marketing communications materials are developed and tested and the market launch
communications plan is finalized. There are full-scale test market evaluations of
prototype materials to confirm the planned positioning and pricing of the product.
Product/offering information packages are assembled, as are sales training programs.
In addition, the detailed marketing plan is upgraded and finalized based on
data/information gathered here.
By the end of this step, the project team is fully prepared to implement the marketing
plan and launch the project with the target customers.
Phase five
30. 30
Product and Process Optimization
The goal in this step is to define the optimum product specifications and manufacturing
process conditions using test market data, pilot facilities and prototype materials.
Process limits are defined to be passed on to the engineering organization doing facilities
design.
In addition, data packages required for technology transfer are begun to support full
technology implementation.
Phase five
Manufacturing Project Planning
Few of major business development plans require the construction or modification of
manufacturing facilities.
These manufacturing projects can require capital investment in the tens to hundreds of
millions of dollars.
Don’t underestimate the expertise needed for manufacturing solution from single
components modules up to complete vehicle assembly, which has to be
implemented into brown field or green field activities.
31. 31
Operations Capability Development
In conjunction with facilities design and specifications, the Project Team must
lay out the detailed design and specifications for all supporting operational
systems and processes, ranging from operational staffing to supply chain
support to financial management systems to customer service frameworks.
The goal is to have all this objectives defined and suppliers identified so that at
the next phase full implementation can go forward rapidly and smoothly.
Phase five
33. 33
Phase six
Implementation and Commercialization
This phase is the finale step of all the development work that has gone on
before. At the start of this phase, the decision is made to go (or not to go) to
full commercialization and definitive / binding agreements are signed.
Significant money is committed for facilities, initial inventory, and
operational staffing, with more than 70 percent of all project spending
typically taking place in this phase.
The team is driving to effectively start-up the new business and successfully
launch its products / offerings into the marketplace.
All the testing and design work carried out in previous phases needs to have
been done right to ensure the project is ready for this phase.
34. 34
Business Formation and Start-up
During this step, the new business entity is formally created, which may be a
new legal entity as well and the management team is named.
The transition plan is implemented and all legal requirements business licenses,
etc. are completed.
One of the critical perspectives about new business development is that
the project team is building a new business and not simply constructing a
plant!
The construction and start-up of major facilities is often the most complex and
expensive part of a new business development project and can come to
dominate the team’s attention, but this can be a costly mistake if it distracts
the team from thinking about forming and starting the business.
Phase six
35. 35
Marketing Plan Implementation
The team now fully implements the detailed marketing plan that was completed at the
end of the last phase. This includes full market launch and ongoing marketplace support
of the offering.
The team must continually monitor performance in the marketplace and be ready to
make quick course corrections in response to the flood of marketplace input that will
follow widespread rollout of the offering.
Phase six
Market Launch
The launch of a new product / service into the marketplace is almost always more difficult
than the development team or senior management expect. This is particularly true for new
business development projects where the level of newness to the organization is high.
Effective launch requires a thoughtful plan and a structured approach to early validation /
feedback on product performance and customer response in high-volume applications.
In addition, the timing of market communications (e.g., newspaper advertising and
press releases) must be aligned with the chosen approach to market introduction
(e.g., high profile vs. “under the radar screen”).
37. 37
Phase seven: Full Operations Commercialization
Full Operations Commercialization
This is the last step in new business development and is simply the full implementation
and follow-up of the multiple plans, staffing, support services, outsourcing , customer
support, etc. that have been developed earlier.
A multitude of tasks must be completed to ensure that a fully commercialized business
with all key capabilities is in place.
The objectives are to ensure that:
• Manufacturing/operations can make the product at the cost, quality and
delivery positions defined in the Integrated Project Plan.
• The technology is proven and can be readily used by both customers and
manufacturing / operations.
• Customers are delighted by the new product / offering.
• The project meets the strategic and financial objectives defined in the
Business Plan
38. 38
Business Development Framework – seven steps to a
successful volume production
Business Development Framework
Phase
One
Phase
Two
Phase
Three
Phase
Four
Phase
Five
Phase
Six
Phase
Seven
Opportunity
Identification
Opportunity
Evaluation
Opportunity
Development
Detailed
Development and
Pre- Negotiations
Scale up and
Definitive
Agreements
Implementation and
Commercialization
Commercial
Operation
Market
Screening
Market Assessment
Business
Case Team
Feasibilty and
Assessment
Business
Plan Team
Alliance Assessment
Partner Selection
Marketing Plan
Negotiating Preliminary
Agreement negotiations
Engineering / Product /
Process Concept
CACO / GLM Resources
RASIC / GM / Directors
Government negotiations
Definitive Agreement
negotiations
Operation / Service
Concept
Business Plan
Product process
development and
demonstration
Test Market evaluation Business Formation and
Start up
Business Case Go / - or No Go Decision
Operations and
Manufacturing Facility
Panning
Product / Process
optimization
Marketing Plan
implementation
Go / - or No Go Decision Final Market planning
Manufacturing Project
Planning and Basic
Design
Market Launch Event
Ongoing Delivery of
Products and Services
BusinessDevelopmentSteps
Operations and
Manufacturing Capability
development
Commercial Facility
Construction & Start up
Continuous Improvement
39. 39
contact
Disclaimer
The study is prepared by AMC - CONSULTANCY an independent research company.
The study is not intended as an offer to sell, or to solicit an offer to buy or form any basis of investment decision for any class of securities of
the company in any jurisdiction. All such information should not be used or relied on without professional advice. The study is a brief summary
in nature and do not purport to be a complete description of the Company, its business, its current or historical operating results or its future
prospects.
This study contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts are
forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause that actual
results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.
This study is provided without any warranty or representation of any kind, either expressed or implied.
Contact:
AMC – ENGEL - CONSULTANCY
Dr. DI. Rupert Engel, MBA
Ried 185
5360 St. Wolfgang
Österreich
Tel. 0043 6138 3573
Mobile: 0043 6605036143
E-mail: r.engel@re-mv.com
www.amc-engel.com
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