Business development planning – what, when and how

Business development planning – what, when and how

“You can have it all. You just can’t have it all at one time.”- said Oprah Winfrey in an interview. Seems very obvious. But, what would you exactly like to have? How much can you have in one time? How long do you have to wait to have it all? How long is “long” and what does “one time” mean in practice? The general wisdom applies here as well: it depends…

Our purpose in this publication is to provide a short overview of the importance of business development planning. In order to do so, there is much to clarify around the phrases and expressions.  In order to understand the importance of business development planning, here comes some clarification on what business development means, and what not.

Business development, product development, sales, business planning. Not to mention more. These are those expressions that are mixed the most  frequently. To be very simple: if they were covering the same issues, they would not have different names. We do not mean to provide a comprehensive scientific review on all of them, as there are several quality pieces published by universities, reputable research institutes all over the world. Nevertheless, important to note, that these publications are coherent in themselves, using their own terminology for their own purposes, so look behind the lines and focus on the content, the essence, to understand their point and come to the right conclusions.

Here we start with finding the place of planning, business planning in particular, in a larger and more general context.

Vision, strategy, plan. Easy to imagine, that outstanding innovations, performances, etc. start with a vision. We can call it also a dream, a call, a mission, however described. It can be rather challenging, like to change the way of communication, or rather simple such as baking the best bread in town. And anything in between. Once it is done, you have to start thinking about how to achieve it. You need a strategy, like – in the case of communication – introducing a new instrument, providing accessibility in 24 hours, also when walking on the street, or – in the case of the best bread – starting a marketing campaign emphasising the advantages of healthy living, with reference to organic ingredients, as an example. Once you are done with the strategy, then you have to operationalise the key items and translate them into longer or short term business plans. This step is probably a bit more dependant on the industry, activities, etc. In machinery production, as an example, where it takes considerable amount of time to produce a piece, and items built in are

similarly complex, medium and long-term planning (means several years) might also be key. Simpler businesses such as bakeries might be running well with annual business plans.

Continuous development. The world is changing, such as customer needs, and let us assume that it is developing, not to enter into another scientific debate over climate change, decreasing biodiversity, overpopulation, etc. Simply accept that people want more, better, bigger, longer, nicer, or quite the contrary, less, smaller, lighter, simpler things, whichever characteristics they associate their well-being and satisfaction with. Taking our initial example of communication, and the devices capable of providing us this service are developing in very different directions: phones are getting lighter, smarter, nicer, though not necessarily smaller, though televisions are getting larger, though lighter at the same time, and also smarter to provide us different communication channels, such as phones are becoming capable of providing one-way communication functions as well. The example of bakeries shows tendencies of very massive diversification, providing “free from” products, different raw materials, tastes, baking techniques, not to mention decorative functions to push this industry towards art from the original nurturing purpose. As a summary: continuous change requires continuous development. But development of what?

Product development. It is associated with all those activities the purpose of which is to achieve the better, larger, smarter, smaller, simpler, etc. product, according to the customer demand. Generally speaking, it is what we are providing to our customers. Although the word ‘product’ is associated with tangible things, most of the relevant terms, ideas, actions, activities can be used respectively for the services, as well. Similarly, though we tend to associate product development with the improvement of an existing product, it also covers the case when a new product is created (like the first smart phone, or the first focaccia in history). And here comes the first ongoing debate in practice, where different approaches created different organisational solutions, structures, etc. in the corporate world.

Business development. This phrase is relatively new in the economic history, besides economics being itself a relatively new independent science.. There is one approach that associated business development with the way of performing, meaning how products and services are provided for the customers. This approach puts emphasis on such basic questions as effectiveness and efficiency, in terms of time, cost, quality, etc. and support activities such as customer care, updates guarantees, service, maintenance, etc.

Emerging and the popularity of certain quality standards were focusing on the procedures, based on the assumption – after some simplifications – that the same procedure shall lead to the same quality. Unfortunately, these standards, accreditations hardly concentrated on the quality of the product, but on the procedure of the production, instead. Currently, the emphasis seems to shift towards individuality, customisation, etc. in many industries, probably our example bakery might be one of those. However, there are still industries where precision, identicality, etc. is the key, like when mobile communication devices are in question.

Another, probably a bit more modern, approach seems to cover more than how products and services are provided to the customers, namely the product development and sales, and everything else that result in a better business performance. It most probably came with those fundamental questions parallel to the ongoing industrial revolution, like: where is the border between a product and a service, e.g. when we buy electronic devices with programs and helpdesk support access, or when breads baked in requested shape, delivered to the requested wedding venue, freshly warm, right before the dinner party? We tend to agree with this approach, as long as the development can be considered as ‘organic’. Inorganic development is another cup of tea, however a very interesting one.

Sales and its development. It is relatively easy to find a place for the sales activity and sales development after the previous statements. The purpose of sales is to sell as much of the products and services as possible, through finding new markets with new customers, new channels and new techniques, etc. Ergo, sales development can be considered as a part of business development. Only one question remains for the last but not least: what is development planning?

Plan the business development. In order to understand this, we might take a step out of the original context and make a short tour in marketing, to bring some easily understandable examples to illustrate the importance of planning. Coming back to the bakery, Christmas tree shaped products are expected to be popular before and around Christmas. Nothing more to explain. You can have brilliant product ideas, e.g. connected to healthy living, and you can still fail, if the idea is without context. You might stay isolated and can only sell some based on personal relationships with your customers in the shop at the corner of the street. Also, the opposite can apply: if there is a massive insurance industry campaign advertising healthy living connected to some insurance fee discount, and your shop cannot present anything associated with healthy living, you might be losing customers on the short run.

You might expect the example related to communication devices, but that is far not that simple. The easiest would be to mention the product

lifecycle issue, meaning that introduce some innovation, development, however described, once your sales figures are forecasted to be declining. What we see is quite the contrary: new mobile phones and gadgets introduced every year, waiting lists generated, leaked out pictures in techblogs, thematising the media for weeks, and also two devices announced in one year for whatever reason. What is this then? It is not because these tech companies do not have the right professionals, but because competition is extremely high in certain segments, such as the generated demand on the other side. Here is another important factor to consider, which is given for the relatively smaller market participants, and a strategic tool for the powerful ones (until the respective authorities do not act against it). Competition. Especially a special form of it: monopolistic competition.

Between these two relatively extreme examples, there are many other areas, industries, products and services, company sizes and business approaches, where development planning can be key. Both the slower and the faster development pace/need can be detrimental in several ways. Remember the issue with the growing popularity and demand thanks to a good marketing campaign or an external impact (healthy living insurance campaign). If cannot be met by the production level, quality or the supporting services, it might cause almost immediate failure, besides generating internal problems amongst the employees. Some examples are: burn outs due to extreme workload in the production area, followed by disappointment in the sales team who actually did their best on their fields. The overall result might be a serious downturn.

When it comes to geographical expansion, you might consider that development steps can mature earlier in one country and later in another, such as certain products seem to be more popular in big cities than in the countryside, and vice versa. Following the bakery example, countries with higher living standards might be more conscious in their choices, than those where survival is the priority. Regions, where baking at home has strong traditions might not be open for deliveries from relatively long distances. Certain cultures give place for more cereals in the nutrition standards than others. In the case of the communication devices, where technological development is very fast, demand for the latest innovations is expected high, too, while countries and regions where analphabetism is still considerable, forcing higher mobile phone penetration might not be successful. 

All in all, continuous business development is key, and might give you the possibility to get everything you want. Though you cannot have it all at once, because there are key factors out of your competence.  So, you need a plan…

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