Definition: Business Development

Business Development Strategy is the procedure of recognizing the opportunities essential for the growth and increased profitability of any business. You can accomplish this goal by lessening expenses, improving productivity, acquiring new customers, or increasing profits from existing customers.

The spectrum of Business Development has now become quite comprehensive, you can also call it a multidisciplinary skill.

Your path to growing a successful business will depend mainly on your company. Like, say a coffee shop owner with three staff members will have different business prospects than a multinational company like Microsoft. The ultimate goal for both companies is the same, “To Make More Money.”

The goal of your sales team is to acquire new customers. Your sales team might generate sales by cold calling customers, email outreach, or networking. The success of your sales team is measured by how many customers they convert.

Business development, on the other hand, covers every part of your business operations. For instance, you might hire a consultant to identify how to reduce your expenses. Or you might hire a consultant to help you come up with a business development plan to enter a new market or promote a new product.

How To Create A Successful Business Development Strategy Marketing?

There is a lot of overlap between business development and marketing. Many marketing departments will combine the roles of a marketer with a business developer. The modern title for that would be a “Growth Hacker”. The growth hacker is responsible for identifying growth opportunities.

A marketing team is traditionally responsible for promoting the products or services to your target audience (you might need to create a customer persona if you don’t know your target audience). The marketing team will promote the service across various online and offline channels. Your team will create the marketing material, and ensure that it aligns with brand guidelines.

How Is Business Development Different from Sales?

The goal of your sales team is to acquire new customers. Your sales team might generate sales by cold calling customers, email outreach, or networking. The success of your sales team is measured by how many customers they convert.

Business development, on the other hand, covers every part of your business operations. For instance, you might hire a consultant to identify how to reduce your expenses. Or you might hire a consultant to help you come up with a business development plan to enter a new market or promote a new product.

Creating a Business Development Strategy: 4 Courses of Action for Growth

There are four basic growth strategies for business development. The four business strategies are namely market penetration, product development, market development, and diversification.

Let’s look at each of these four business development strategies in more detail:

Diversification

Diversification is where a firm creates a new product for a new market. It is a high-risk growth strategy. Many companies have attempted diversification and failed. For example, Google spent billions of dollars on Google Plus. The product was supposed to compete with Facebook. The product was a failure.

However, diversification can also lead to rapid growth. There are many examples of companies that have pivoted into a new niche and grown fast. Again, Google is a good example. The purchase of YouTube paid off big time. The company is now the dominant player in text search and video search.

Diversification can change your business model. That can be a positive or a negative thing as well. For example, Nintendo originally created card games. They no longer create card games. Diversification completely changed their business.

Product Development

Product development refers to all the stages of bringing a product to market. It starts with coming up with an idea. You then test demand, add features, test, and release the product. Once the product is released, you might then make updates to the product.

The Lean Startup methodology is one of the most important theories related to product development. The basic idea is that you test the demand for your product by releasing a Minimum Viable Product (MVP). You then improve the product once you’ve seen there is a demand for your product or service offering. Startups should use this model.

It’s more difficult for an established company to use the Lean Startup methodology. Releasing a product with a lot of bugs, for example, can result in negative press that can impact your brand’s reputation.

Market Penetration

Market penetration measures how much of your market you control. Essentially, it’s a measure of how you compete against other firms offering the same product or service. For instance, there are several soda products. The market leader is Coca-Cola. Pepsi Cola comes in second, followed by other brands.

Your market penetration will impact your marketing and growth strategies. For example, if you’re the market leader, you will have good brand recognition. Your goal will be to retain your position and watch out for competitors who are trying to steal your market share.

The best way to maintain your position is through consistent innovation. Amazon is probably the best example of this. Each new improvement they release makes it harder for a competitor, especially a new startup, to compete.

If you don’t have market penetration, you will need to figure out how to steal market share from competitors. Companies often do this by reducing the cost of a product or service. Or, you might try to create a product or offer a service that is better than the market leader.

An alternative to trying to compete with established market leaders is to try and establish a new niche. That might not be an option for your business. However, it offers the best opportunities for rapid growth. A nice example of a company that took this approach is Clickfunnels. Rather than positioning themselves as a landing page builder, they created the sales funnel software niche. They are the market leader in this niche that they established.

Market Business Development Strategy

Market development is a growth strategy for identifying new places to sell existing products. The new market could be a new city, country, or target market. Business development processes can help firms come up with a strategy to enter a market.

Examples of market development, include Amazon trying to enter the Indian market. Or Tesla building an automobile factory in China. Both of these strategies are about finding new customers for existing services and products.