7 Potential Areas for Business Development
As noted earlier, business development can require employees throughout an organization to work in tandem to facilitate information, strategically plan future actions, and make smart decisions. Here is a summary list of potential areas that business development may get involved in, depending on the organization.
Market research and analysis: This information helps identify new market opportunities and develop effective strategies.
Sales and lead generation: This involves prospecting, qualifying leads, and coordinating with the sales team to convert leads into customers.
Strategic partnerships and alliances: This includes forming strategic alliances, joint ventures, or collaborations that create mutually beneficial opportunities.
Product development and innovation: This involves conducting market research, gathering customer feedback, and collaborating with internal teams to drive innovation.
Customer relationship management: This involves customer retention initiatives, loyalty programs, and gathering customer feedback to enhance customer satisfaction and drive repeat business.
Strategic planning and business modeling: This includes identifying growth opportunities, setting targets, and implementing strategies to achieve sustainable growth.
Mergers and acquisitions: This involves evaluating potential synergies, conducting due diligence, and negotiating and executing deals.
What Is Business Development?
In the simplest terms, business development is a process aimed at growing a company and making it more successful. That can include seeking new business opportunities, building and sustaining connections with existing clients, entering strategic partnerships, and devising other plans to boost profits and market share.
KEY TAKEAWAYS
The overarching goal of business development is to make a company more successful.
It can involve many objectives, such as sales growth, business expansion, the formation of strategic partnerships, and increased profitability.
The business development process can impact every department within a company, including sales, marketing, manufacturing, human resources, accounting, finance, product development, and vendor management.
Business development leaders and team members need a wide range of both soft and hard skills.
How Business Development Works Within an Organization
Business development, sometimes abbreviated as BD, strives to increase an organization's capabilities and reach in pursuit of its financial and other goals. In that way, it can impact—and also call upon the specialized skills of—a variety of departments throughout the organization.
Sales and Marketing
Sales personnel frequently focus on a particular market or a particular (set of) client(s), often for a targeted revenue number. A business development team might assess the Brazilian market, for example, and conclude that sales of $1.5 billion can be achieved there in three years. With that as their goal, the sales department targets the customer base in the new market with their sales strategies.
Business development often takes a longer-range perspective in setting goals than many sales departments have in the past. As the Society for Marketing Professional Services puts it, "A traditional view of sales is akin to hunting, but business development is more like farming: it's a longer-term investment of time and energy and not always a quick payoff."
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Marketing, which oversees the promotion and advertising of the company's products and services,, plays a complementary role to sales in achieving its targets.
A business development leader and their team can help set appropriate budgets based on the opportunities involved. Higher sales and marketing budgets allow for aggressive strategies like cold calling, personal visits, roadshows, and free sample distribution. Lower budgets tend to rely on more passive strategies, such as online, print, and social media ads, as well as billboard advertising.
Legal and Finance
To enter a new market, a business development team must decide whether it will be worth going solo by clearing all the required legal formalities or whether it might be more sensible to form a strategic alliance or partnership with firms already operating in that market. Assisted by legal and finance teams, the business development group weighs the pros and cons of the available options and selects the one that best serves the business.
Finance may also become involved in cost-cutting initiatives. Business development is not just about increasing market reach and sales, but improving the bottom line. 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. The outsourcing of non-core work, such as billing, technology operations, or customer service, may also be part of the development plan.
Project Management/Business Planning
Does an international business expansion require 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- and time-related assessments. Then, the project management/implementation team can swing into action to work toward the desired goal.
Product Management and Manufacturing
Regulatory standards and market requirements can vary across regions and countries. A medicine of a certain composition may be allowed in India but not in the United Kingdom, for example. Does the new market require a customized—or altogether new—version of the product?
These requirements drive the work of product management and manufacturing departments, as determined by the business strategy. Cost considerations, legal approvals, and regulatory adherence are all assessed as a part of the development plan.
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