Sales, marketing, project management, and vendor management are just a few of the departments involved in business growth. There is also networking, negotiating, cooperation, and cost-cutting measures. All of these many departments and operations are motivated by and linked with corporate development objectives.
For example, a company may have a successful product or service in one location, such as the United States. The company development team evaluates possible future growth. After careful consideration, investigation, and analysis, it is determined that the product or service may be expanded to a new location, such as Brazil.
Salespeople concentrate on a certain market or a specific (set of) client(s), generally with a specific revenue goal in mind. In this scenario, business development evaluates the Brazilian markets and determines that $1.5 billion in sales may be attained in three years. With such goals in place, the sales department uses its sales methods to target the consumer base in the new market.
Marketing entails promotion and advertising aimed at successfully selling things to end-users. Marketing aids in the achievement of sales objectives. An expected marketing budget may be allocated to business development projects. Increased marketing budgets enable more aggressive marketing methods such as cold phoning, personal visits, roadshows, and free sample distribution. Low-budget marketing methods, such as restricted internet advertisements, print ads, social media ads, and billboards, are more common.
Partnerships or Strategic Initiatives
Will it be better to enter a new market on your own by completing all necessary paperwork, or will it be more prudent to build a strategic alliance or collaboration with local enterprises already functioning in the region? The business development team, assisted by legal and financial teams, assesses all of the advantages and drawbacks of the available alternatives and chooses the one that best serves the firm.
Business Planning/Project Management
Is a new facility in the new market required for company development, or will all items be created in the base nation and then imported into the targeted market? Will the latter option need the construction of an extra facility in the base country? The company development team makes such judgments based on their cost and time evaluations. The project management/implementation team then goes into action to achieve the intended result.
Regulatory criteria and market needs differ from one country to the next. For example, a medication with a given composition may be permitted in India but not in the United Kingdom. Is a customized—or entirely new—version of the product required for the new market?
As determined by the company strategy, these requirements drive the activity of the product management and production divisions. A company growth plan evaluates cost considerations, legal permissions, and regulatory conformance.
Will the new company require the services of third-party vendors? Will, for example, the shipment of a product needs the use of a specialist courier service? Will the company collaborate with an existing retail chain for retail sales? What are the expenses for these engagements? The business development team is addressing these concerns.
Lobbying, networking, and negotiating
A few corporate efforts may necessitate soft skills knowledge. Lobbying, for example, is permitted in some places and may become vital for market penetration. Other soft skills such as networking and negotiating with other parties such as suppliers, agencies, government authorities, and regulators may be required. All of these activities are part of the company’s growth process.
Savings on expenses
Business development involves more than just expanding sales, products, and market penetration. Strategic decisions, including cost-cutting initiatives, are also required to boost the bottom line. An internal review that reveals excessive travel expenses, for example, may lead to adjustments in travel policy, such as having video conference calls instead of on-site meetings or choosing less expensive transportation options.
Similar cost-cutting strategies can be implemented by management through outsourcing non-core tasks such as invoicing, accounting, financials, IT operations, and customer support. Business development includes the strategic alliances required for these projects.
What Should a Business Developer Understand?
Because company development entails high-level decision-making, the business developer should be aware of the following:
- SWOT analysis of the current situation of the firm (strengths, weaknesses, opportunities, and threats)
- The current situation of the industry and future growth estimates
- Evolution of competitors
- Primary sources of contemporary business sales/revenues and dependence
- The buyer’s profile
- Market prospects that have yet to be discovered
- New domains/products/sectors with the potential to complement the present firm are eligible for business expansion.
- The long-term perspective, particularly in relation to the activities suggested
- The cost areas and potential cost-cutting strategies
The Business Strategy
The following business growth scenario is particular to a business expansion strategy, the influence of which may be felt by practically every unit of the firm. Similar business development objectives include the creation of a new business line, the creation of new sales channels, the creation of new products, the formation of new alliances in existing or new markets, and even merger and acquisition (M&A) choices.
In the case of a merger, for example, considerable cost savings can be realized by combining the common tasks of the two organizations’ production, finance, and legal departments. Similarly, a company that operates from five distinct locations in a city can be relocated to a huge central site, resulting in considerable cost savings. However, if the new site is inconvenient for everyone, would this result in staff attrition? Such concerns must be evaluated by the company development team.