What is Business Development? Meaning and activities
Business Development: this article explains Business Development in a practical way. After reading, you will understand the basics of this powerful marketing tool on business development with customers, partners and long-term relationships. The article contains an explanation of this concept, including various activities related to business development. Enjoy reading!
What is Business Development?
Business Development as a concept is also popularly known as BizDev. This method focuses on the organic growth of the company by improving services and products in existing markets. In the business world, however, business development is geared towards finding new markets for existing services or products by developing both organic and inorganic growth resources.
This concept is a multidisciplinary management discipline and deals with the design and formation of products, services and business processes that reinforces organizational commercialization. It helps to detect new opportunities, creates needs and design alliance strategies for the company to achieve continuous growth.
This method occurs in the creation of long-term value in the external processes of the organization, taking advantage of opportunities that are in the environment and establishing synergies to sell more. This includes the increase of economic income, commercial expansion, increase of profitability, creation of strategic associations among others.
The focus of market (or competition), customers and sales are fundamental in any business, that is why Business Development is essential for growth and business expansion, for this is important to use tools such as market research.
Through Business Development business want to explore new alternatives for sources of income in:
- New markets
- Product licensing opportunities
- Acquisition of companies
- Development of new products/adaptations of products in the portfolio
- New distribution channels
- Alliances with other companies
Business Development is commonly used by large organizations to increase their growth.
Business Development in other fields than marketing and sales
This concept is not detached from marketing and sales. However, Business Development identifies new business areas as new markets, distribution channels and new products by creating synergies or partnerships with other companies.
This is why no sales or marketing is done directly as Business Development identifies the expansion of the fields of action for products and services that the company has or wants to have.
It is important that both teams, Business Development and Marketing work in a synchronized manner to achieve the common goal of organizational growth. The main responsibility of marketing is to promote the brand and position it in the market.
This is achieved through communication strategies (advertising, public relations, content marketing etc.) with this being linked to business development so that this promotes potential customers and turns opportunities into long term sales.
What should a business developer do?
It is important to identify opportunities in business environments in potential markets that have not yet been exploited such as the extension of new geographical areas or the development of products/services.
This could be a main goal for every business developer. It is important to recognize opportunities for company growth, being one step ahead of market movements and the competition.
A business developer also manages and analyses data to produce sales management information, this may include:
- Reasons for wins/defeats
- Progress of opportunities in relation to the sales process
- High performance salespeople / sales channels
- Sale of services / products
Create opportunities if there are none at the moment
Organizations must have the ability to create opportunities for business growth, be continuously exploring markets to strengthen the organization.
It is necessary to establish strategic alliances with external companies either to expand territorially or to develop new products/services. Synergies are key to the evolution of your business.
Companies must be continuously updating technologies for the evolution of the processes that are needed. In addition companies must be in constant search of the new changes that are presented today.
This concept should be a step beyond reality and routine. Ask yourself daily how to improve procedures in order to make a difference in the industry.
Strategies are vital to business growth and objectives. It is not possible to be tied to improvisation as these can develop errors that are detrimental to the company.
Business Development Activities
Below you will find the sales or business activities and strategies that can bring value to your organization:
- The current state of the company (SWOT analysis)
- Review of growth projections
- Competitive developments
- Customer profile, market opportunities, new products
- Sectors that will benefit from the company’s expansion
- Long-term vision
The development of the activities is beneficial for the growth of the company as it seeks opportunities in external markets by identifying, researching and analysing to bring new business and products to market.
The people involved in these activities must postulate creative ideas that resemble the reality of the company and be open to constructive criticism and comments in the process of business to have a broad vision of organizational growth that can be consolidated.
Business Development Actions
- The company must be up to date with its competitors’ activities in order to innovate and go one step further
- Read news about the geographical market and customers in order to detect business opportunities and also have information to improve every day more
- To be in constant communication with clients and potential clients to strengthen relationships
- Carry out surveys on the experience they have in the market with product etc.
- Identify companies with which alliances and synergies can be made to save costs, improve distribution, new customers or simply sell more
For example, in the case of an organization whose business model is based on partners, a business development plan could include both strategic phases and the identification and study of potential partners. Business development in its broadest sense could fall under the responsibility of other departments mentioned above.
Business Development in different departments
The business development activities are spread over different fields and departments including: sales, marketing, project management, product and supplier management among others. These are aligned to achieve business development objectives.
Business Development can be connected to various functions or departments:
How customers are found. Improving customer acquisition through different sales channels will help the company grow.
This is linked to sales. Marketing is the promotion and advertising to be successful in sales.
It is important to generate partnerships when you want to be in a new market, it can be a good strategy for growth.
Plan the processes to reach the objectives you want to achieve according to the cost and time you have.
A way to increase profits by reducing costs. Strategic decisions must be made to improve cost saving results.
Business Development Advantages
The strength of communication skills is fundamental to achieve growth objectives since a good socialization with customers, potential customers and partners make such development increases in a positive way because having a good communication you have a good understanding of what is the customer and the market to which you want to expand the organization.
The tenacity to seek or create new opportunities in strategic alliances with different companies. The work team must detect in their environment or seek innovation in opportunities that give value in the long term.
Analysing existing data in the organization can guide the development of business plans and light the way to take advantage of opportunities that may already exist.
Business Development focuses on the implementation of the strategic business plan through capital financing, acquisition, developments in technologies and products as well as strategic partnerships when appropriate.
The primary function of Business Development is to use partners to reach the right new customers and creating opportunities for long-term, continuous value. This method is also aiming to create strong relationships for the growth of the company because by identifying partners that fit what the company needs it creates added value to the business expansion it wants to achieve.
It is vital that in order to implement a business development it is understood which is the current state of the company, see the opportunities or create them, look at what the competition is doing and manage to formulate coherent strategies that can benefit the growth of the organization passing from the products and services offered, distribution channels, consolidation and finally growth.
For most companies with a long history, the term Business Development is used to establish or manage strategic alliances with the idea of taking advantage of the knowledge that the organization has to identify, investigate, analyse and bring new businesses and products to the market.
It is your turn
What do you think? Is Business Development only applicable in large companies? Or is it also beneficial for small and medium organizations? Is it important to have a business developer in an organization? Can you share with us your experience using this tool in your company? Do you understand the practical explanation or do you have something else to add?
Share your experience and knowledge in the comments box below.
- Bussgang, J. J., Eisenmann, T. R., Dillard, S., Nevins, K., & Ramani, P. (2011). The Business Development Manager.
- Gall, J., & Board, A. H. (2011). Business Development Manager.
- Green, G. (2015). Business Development Manager. Air/Fuel Products, Visteon Corp.(313), 755-3749.
- Smyth, H. J. (2016, September). The business development manager as a value creation worker. Association of Researchers in Construction Management (ARCOM).
How to cite this article:
Ospina Avendaño, D.(2020). What is Business Development? Meaning and activities. Retrieved [insert date] from Toolshero: https://www.toolshero.com/strategy/business-development/
Published on: 05/05/2020 | Last update: 01/27/2023
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