Notes on Business Development Process Model

INTRODUCTION
The Business Development Process model offers a structure linking the aspects of data, decisions and business activities to provide a basis for creating and maintaining a rational and complete Business Plan. The elements of the structure are: 1. Internal and external data sets (yellow items) 2. Deciding and defining the Business Focus (orange items) 3. Monitor and Review of Marketing (green items) 4. Monitor and Review of Operations (blue items) Each element can be worked on in isolation and action to improve the knowledge built into the Business Plan can start in any location. The model primarily defines the customer and supplier relationships inherent in building an integrated plan for the whole business. The benefit of such a plan is that it: enables all stakeholders to appreciate the full range of business needs; enables assessments to be made of the impact that varying allocations of resources may have on overall business performance.

The result of using the model in planning should be steadily improving business profitability as the quality of the decision process and the information used therein improves.

1) INTERNAL AND EXTERNAL DATA

The principal sets of data required for coherent planning the 4 Cs are all combinations of internal and external data:

a) Circumstances
Information on events and situations relevant to the needs and ambitions of the Business; state of the relevant economic cycles; the business position in relation to these events and cycles

b) Customers
Both actual and prospective; both macro and micro level data is needed to understand the causes of differences in customers needs and to enable market segments and sizes to be evaluated

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c) Capabilities
Relative capability is the key assessment needed which again demands information on the world outside the business as well as a realistic assessment of the business own significant capabilities and deficiencies

d) Competitors
There is much talked about the significance and otherwise of competitors and often just a few attract the mass of publicity; but a significant source of potentially unique and valuable information is that available daily to the customer facing people within the business;

2) DEFINING BUSINESS FOCUS

One of the purposes of the Business Development Process outlined in the model is to enable a profitable match to be created between the Market Opportunities and the Business Aims and Competences. Whatever the situation, the key decision to be addressed if profitability is to be maximised always has to be: Which market(s) are we and do we want to be in? Defining the Business Focus is the core process in answering this question. The process comprises the series of elements across the centre of the diagram; they flow from left to right. The process is relevant whether a single market idea or a portfolio of ideas is being evaluated. To create a rational assessment and plan, each step has to be addressed; though some of them will require little, if any, special attention in the case of a successful going concern. The contribution of each element is outlined in the following paragraphs.

a) Market Segmentation.
This is the marketing term for the process of identifying the characteristics of potential Customers and their needs that define an organisations ability to meet them competitively, when compared with the abilities of other suppliers in the marketplace. The characteristics vary for different types of market, customers and needs. They relate directly to the ways in which the selling organisation has to behave in order to be successful in winning a share of the segment business. These behaviours are grouped under the generic title of marketing mix. Marketing mix is typically used to refer to the combination of four features of a market offering: The product, its specification and performance The pricing, its costs of acquisition and of ownership The promotion, the methods used to generate sales The placement, methods used bring the product or service together with the Customer

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These four features are examined more fully in the later section on the Segment Marketing Mixes. In the strictest sense, whenever a characteristic of the Customer causes a change to be necessary in some aspect of the marketing mix, then that customer is a member of a different market segment. The most commonly recognised characteristics include location, size, business type, product usage and application; but there are many more relevant to different market opportunities. The majority of characteristics have an element of scale in them rather than being yes/no items and also work in conjunction with other characteristics rather than stand alone as a definitive consideration. The result is that the boundaries between different market segments can appear indistinct rather than sharp and clear. Yet having a clear understanding of who is a potential customer for your business has been shown repeatedly to be critical to significant and continued success, and a determinant of profitability. Which is why there is probably as much written and investment made in market segmentation as almost any other business planning topic, with the possible exception of financing and investment.

b) S.W.O.T. (Strengths, weaknesses, opportunities, threats)

This step follows Market Segmentation, as the assessment is made in relation to and is only relevant to each particular market opportunity. A business may have a number of generic strengths, allowing it to consider a range of market opportunities; but to maximise profitability it is necessary for the business to be clear about the competitive position held in each market segment, which requires consideration of the particular strengths needed in each market. i) Strengths and Weaknesses These are characteristics of the business that are within the capability of the business to change. The changes can involve investment in capabilities, such as technology, training, and facilities; or can involve investment in re-focussing the business into different market segments, or use of alternative technologies, marketing strategies, etc. ii) Opportunities and Threats These are characteristics of the environment within which the business operates and consequently over which it has much less control or ability to change. The business should be aware of the relative significance of these characteristics and have considered the policies needed to manage its responses as changes occur. Although Competitors are the most obvious threat, there can be many other factors, e.g., supply chain, distribution, skills availability, that can change the quality of the prospects in a market segment.

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c) Select Market Focus

The first decision to be made from the segmentation and SWOT is which market and segments or segments within it are to be the focus of the business, and what targets are to be set for market share(s). It is important to consider market share, as this is a primary determinant of profitability. Winning higher shares will usually demand higher rates of investment; the pay-off ultimately being delivered in the form of higher profitability, business stability and resilience in changing market conditions.

d) Select Positioning and Critical Success Factors (CSFs)

Positioning is a basic element of the business proposition. It is linked with other attributes such as the business vision and mission. It is not critical to success; but can be a very powerful tool in developing an image for the business and building loyalty between the business and the customer base. A good positioning epitomises both what the business stands for and how it is positively different from the competition. It is buttressed by Unique Selling Propositions (USPs) distinctives - within the services and products it offers; but the thread that unites and is easily and universally understood across all offerings is the Positioning of the business. Positioning is linked with critical success factors (CSFs) because each position of real value in the market place will demand that the occupier of the position clearly demonstrates its ownership. If ownership of a declared position is not evident the whole organisation may suffer ridicule as a consequence. The CSFs will be those aspects of delivery or presentation of the business that primarily demonstrate ownership of the chosen position.

e) Segment Marketing Mixes

The segment marketing mix is the principal constructive output from the Business Focus definition. It is used to direct the business operations and marketing. By definition, each market segment requires its own Marketing Mix. Wherever the same marketing mix can be used to win business, then those potential customers are all part of the same market segment; wherever they may be located, of whatever size they are, or whatever business they are engaged in, if the same marketing mix works then they are all part of the same market segment. The marketing mix is a set of behaviours designed to make the business competitive and able to win Customers. The differences in marketing mixes are responses to the differing needs among potential customers in a market place. The behaviours typically grouped under the generic title of marketing mix, often also referred to as the four Ps, are the combination of four groups of features of a market offering: The product, its specification and performance; The pricing, its costs of acquisition and of ownership; The promotion, the methods used to generate sales;

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The placement, methods used bring the product or service together with the Customer.

If the process of defining the business focus has been coherent and inclusive, the marketing and operations management will be well equipped to complete and implement their plans for achieving the companys goals in the market place.

3) MONITOR AND REVIEW OF MARKETING

The parameters to be used for managing the strategic aspects of market development market shares, margins, promotional performance, etc., - will be derived from the business aims and objectives reviewed and derived during the business focus selection and definition of the marketing mixes. The data collected by monitoring these parameters will be reviewed periodically within the marketing functions to assess the relative success of the plan and any alternatives tried. The output from the reviews will be used to inform the further revisions and planning.

4) MONITOR AND REVIEW OF OPERATIONS

The parameters to be used for managing the strategic aspects of operations development - capabilities, quality, costs, customer satisfaction, etc., - will be derived from the business aims and objectives reviewed and derived during the business focus selection and definition of the marketing mixes. The data collected by monitoring these parameters will be reviewed periodically within the operations functions to assess the relative success of the plan and any alternatives tried. The output from the reviews will be used to inform the further revisions and planning.

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