This section examines how company managers plan for the future and determine which products, markets and territories offer the greatest commercial potential for their business.
Pre-requisites for Business Development Major Change Projects
A number of factors all have an influence on the business’s future and each has to be given sufficient management attention to ensure the company makes the best use of its finite resources. The company’s response to these influences is reflected in its business strategy and objectives. These should give everyone in the company a clear vision as to how the directors want the business to develop and strong guidance as to what each person needs to do in order to help the company achieve the objectives.
In order to develop your business in a coherent and coordinated way, you will need to have the following:
· An understanding of the key internal, external, national and international factors that are driving the need for change within the business
· Using your knowledge of the international situation and of the present capabilities of your business, a set of business objectives and financial goals must be agreed by all of the senior management of your company. These need to be clearly articulated and communicated to everyone in the business.
· An agreement between the senior management team to take collective responsibility for planning how the company objectives can be realistically achieved within the agreed time scales
· An excellent understanding of the type of products and services which are needed in the specific markets your company plans to sell to. This will include an understanding of what makes your competitor’s products successful in these markets and what will differentiate your products.
· This understanding should be developed to define the portfolio of product and service offerings you will use to generate the sales revenues and profits needed to deliver the short and long term commitments made in the business plan
· Having defined the portfolio, you need to move on to define the way in which your company plans to sell these products and services in its chosen markets to achieve the necessary market share, sales revenues and margins to meet to objectives and maintain the company’s financial viability
· Knowing how you plan to address your markets, your company will now need to look at the difference between the way you currently operate and the requirements on the business generated by your future plans. This will probably involve you in a number of change projects and the introduction of a number of new or improved products.
· You will therefore need to understand how these change projects will be planned, resourced and managed.
· Your business plan (see below), developed by your senior management team will contain all of the information mentioned in this list and the details of your change project portfolio.
Responses from companies attaining high scores for business development, stress the importance of having a formal business plan. This is prepared and owned by the senior management team that takes joint responsibility for delivering it. The business plan must provide a commentary on all aspects of the business including:
· Current and emerging technologies
· Supply chain initiatives
· Change projects
· People development
· Financial reports projecting performance over the next three years to include:
o Financial summary
o Performance against previous plan
o Sales and profit before tax
o Cash flow
o Profit and loss account
o Balance sheet
o Risks and opportunities
o Product development costs
o Capital expenditure
o Employee and payroll costs
It is this information, supported by well developed planned initiatives, that underpins financial performance and provides the confidence needed in order to invest in the business.
A Process for Business Development
Many businesses are recognising the benefits of structuring activities around the core processes needed to deliver products and services to their customers. They start by identifying customer needs, followed by designing products and associated manufacturing processes, managing supply chains to make high quality products and distributing them on time to customers.
Traditional structures, based on the concepts of people working in functions and routinely performing simple tasks, have resulted in over complex processes and discontinuities of ownership that add unnecessary time delays and increased costs.
The Role of Continuous Improvement
So far, this introduction has focused mainly on the need for significant change projects. It is, however, important to also realise the benefits to be gained from continuous improvement initiatives. These initiatives involve a large number of small improvements, carried out by everyone in the company. These small changes consistently improve day to day activities and maintain profitability. The benefits from these small changes accumulate over time, often making a significant contribution. It is therefore important that you do not neglect these projects that focus on the detail of how things can be improved and ensure they are well managed and properly resourced.
The Role of Marketing in Business Development
In many companies, development activities are focused almost exclusively within design and manufacturing. Marketing often remains the least well defined business process. Marking people must accept the challenge of identifying quantified future sales opportunities and specifying the products and services needed to meet these customer requirements. In some instances companies make very little distinction between marketing and sales activities which means the business is reacting to sales opportunities as opposed to planning and influencing its future.
The MX Start results show that successful businesses invest considerable resources in marketing. This requires managers to seek out opportunities for growing a profitable business by identifying future customer requirements and ensuring the necessary technologies will be available to foster product and process innovation.
The way companies generate sales is dependent upon the type of business. However, successful companies use all means at their disposal to contact the key decision makers and structure their proposal around those features they have identified as being of value to their customers.
In order to compete effectively, your company will need to adopt to change as a way of life. This requires you to establish major change projects as part of the business planning process to ensure that:
· New products are available on time to satisfy the market demand
· Operational improvements will deliver the cost reductions needed to retain the necessary competitive advantage and establish the capability to deliver high quality products on time to customers
In order to be successfully at implementing your major change projects, you will need to assign the appropriate resources to them. This includes full-time, dedicated people who are responsible for initiating and implementing change across all aspects of the business. In business today, change is a way of life and is a fundamental part of the business planning and management process. Your best strategy for success is to embrace it.