Business development entails tasks and processes to develop and implement growth opportunities within and between organizations. [1] It is a subset of the fields of business, commerce and organizational theory. Business development is the creation of long-term value for an organization from customers, markets, and relationships. [2] Business development can be taken to mean any activity by either a small or large organization, non-profit or for-profit enterprise which serves the purpose of 'developing' the business in some way. In addition, business development activities can be done internally or externally by a business development consultant. External business development can be facilitated through Planning Systems, which are put in place by governments to help small businesses. In addition, reputation building has also proven to help facilitate business development.
In the limited scholarly work available on the subject, business development is conceptualized as or related to discrete projects, specific modes of growth, and organizational units, activities, and practices. Sorensen [3] integrates these different perspectives with insights from chairmen and managing directors, senior business developers, and venture capitalists from successful high-tech firms worldwide, which is adopted in the Palgrave Encyclopedia of Strategic Management:
″Business development is defined as the tasks and processes concerning the analytical preparation of potential growth opportunities, and the support and monitoring of the implementation of growth opportunities, but does not include decisions on strategy and implementation of growth opportunities.″ [4]
In practice, the term business development and its actor, the business developer, have evolved into many usages and applications. Today, the applications of business development and the business developer or marketer tasks across industries and countries, cover everything from IT-programmers, specialized engineers, advanced marketing or key account management activities, and sales and relations development for current and prospective customers. For this reason, it has been difficult to discern the unique features of the business development function and whether these activities are a source of profits.
Recent systematic research on the subject has outlined that the contours of an emerging business development function with a unique role in the innovation management process. The business development function seems to be more utterly matured in high-tech, and especially the pharma and biotech industries. [5] [6] [7]
The business developer is concerned with the analytical preparation of potential growth opportunities for the senior management or board of directors as well as the subsequent support and monitoring of its implementation. Both in the development phase and the implementation phase, the business developer collaborates and integrates the knowledge and feedback from the organization's specialist functions, for example, research and development, production, marketing, and sales to assure that the organization is capable of implementing the growth opportunity successfully. [3] The business developers' tools to address the business development tasks are the business model answering "how do we make money" and its analytical backup and roadmap for implementation, the business plan.
Business development professionals frequently have had earlier experience in sales, financial services, investment banking or management consulting, and delivery; although some find their route to this area by climbing the corporate ladder in functions such as operations management. Skill sets and experience for business-development specialists usually consist of a mixture of the following (depending on the business requirements):
The "pipeline" refers to the flow of potential clients that a company has started developing. Business development staff assign to each potential client in the pipeline a percent chance of success, with projected sales volumes attached. Planners can use the weighted average of all the potential clients in the pipeline to project staffing to manage the new activity when finalized. Enterprises usually support pipelines with some kind of customer relationship management tool or database, either web-based solution or an in-house system. Sometimes business development specialists manage and analyze the data to produce sales management information. Such management of information could include:
For larger and well-established companies, especially in technology-related industries, the term "business development" often refers to setting up and managing strategic relationships and alliances with other, third-party companies. In these instances, the companies may leverage each other's expertise, technologies, or other intellectual property to expand their capacities for identifying, researching, analyzing and bringing to market new businesses and new products. Business development focuses on the implementation of the strategic business plan through equity financing, acquisition/divestiture of technologies, products, and companies, plus the establishment of strategic partnerships where appropriate.
Business development is to be thought of as a marketing tactic. The objectives include branding, expansion in markets, new user acquisition, and awareness. However, the main function of business development is to utilize partners in selling to the right customers. Creating opportunities for value to be ongoing in the long term is important. To be successful in business development the partnership must be built on strong relationships. [8]
Business Development is affected by external factors. "Planning Systems" are systems set in place in order to regulate businesses. In many cases, ruling agencies deem the necessary for business survival. [9] There is a section of Business that is dedicated to facilitating ethical business development in developing countries. In the early 2000s, Business Ethics was dedicated to helping the Businesses in need that are in these countries. However, owing to the strong backlash from critics, they have changed their focus into helping businesses that are going to help the most people develop. These policies have improved the quality of life of the people. However, this facilitation changes the norms and, in turn, harms some groups. In order to enforce the new policies in an ethical manner Business Ethicists have created a cost-benefit analysis, placing an emphasis on basic necessities. These concerns have become so great that Business Ethicists have created a new department called Development Ethics. Now, instead of simply helping developing businesses, international business developers have begun ensuring that the companies keep basic human rights in mind. This especially applies to countries where the laws are not so strict and allow for abuse to take place. These development policies now have to follow the criteria that Penz created, consisting of: security, empowerment, rights, equity, integrity, and cultural freedom. [10] The idea of providing people with human rights in order to facilitate business development can be seen through the rapid development of China in the last few decades. The policies that were implemented in the last couple decades coincide with these developments. In the 1980s, government policies facilitated the rise in literacy rate and education. The following decade, healthcare coverage increased significantly. This development was not originally seen as monetary capital, but instead, it was seen as human capital. With more workers able to bring skill and maximum effort to their workplace, companies were able to develop extremely rapidly. [11]
With companies becoming more and more conscious of ethical practices, closely watching themselves to avoid scrutiny, a company's reputation has become a great concern. Ethical business practices are closely tied with reputation which makes it essential to follow ethical guidelines if a company is looking to build their reputation. In fact, businesses that develop quickly and successfully have tendencies to show honesty, impartiality, and service to all of their stakeholders. In order for a company to be considered "ethical", it must cater to the needs of the customer, keeping their best interest in mind. This will influence customers to make repeated purchases and lead to more profit. In order for a company to build a strong reputation with their suppliers, it is crucial for them to focus on impartial business interactions and developing long relationships. These relationships can lead to mutually-beneficial business deals for both the company and its supplier. With the employees, they must take their interests into consideration and facilitate teamwork as opposed to rigorous competition. This ensures that the company will keep their most loyal and dedicated employees for as long as possible. Funding for further development can rise when a company is able to develop strong relationship with each stakeholder individually, and ethically. This is based on the concept of reciprocation, which states how in order for social change to take place between groups of people, trust must be built between them through mutually beneficial actions. This can be supported through the results of a questionnaire study that was conducted on technology industries in GTSM and TSE. [12] In addition, in order for a company to practice business ethics, and ensure strong business development, it is essential to maintain a positive relationship with the environment. With concerns about the recent decline of the environment increasing, stakeholders have become more involved in efforts to preserve resources and a negative impact on the environment brings about risks of damaging stakeholder relationships. [13]
Customer relationship management (CRM) is a process in which a business or another organization administers its interactions with customers, typically using data analysis to study large amounts of information.
Public relations (PR) is the practice of managing and disseminating information from an individual or an organization to the public in order to influence their perception. Public relations and publicity differ in that PR is controlled internally, whereas publicity is not controlled and contributed by external parties. Public relations may include an organization or individual gaining exposure to their audiences using topics of public interest and news items that do not require direct payment. The exposure is mostly media-based, and this differentiates it from advertising as a form of marketing communications. Public relations often aims to create or obtain coverage for clients for free, also known as earned media, rather than paying for marketing or advertising also known as paid media. However, advertising is also a part of broader PR activities.
A business plan is a formal written document containing the goals of a business, the methods for attaining those goals, and the time-frame for the achievement of the goals. It also describes the nature of the business, background information on the organization, the organization's financial projections, and the strategies it intends to implement to achieve the stated targets. In its entirety, this document serves as a road-map that provides direction to the business.
A management information system (MIS) is an information system used for decision-making, and for the coordination, control, analysis, and visualization of information in an organization. The study of the management information systems involves people, processes and technology in an organizational context. In other words, it serves, as the functions of controlling, planning, decision making in the management level setting.
In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on consideration of resources and an assessment of the internal and external environments in which the organization operates. Strategic management provides overall direction to an enterprise and involves specifying the organization's objectives, developing policies and plans to achieve those objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision-making in the context of complex environments and competitive dynamics. Strategic management is not static in nature; the models can include a feedback loop to monitor execution and to inform the next round of planning.
Marketing management is the strategic organizational discipline that focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of marketing resources and activities. Compare marketology, which Aghazadeh defines in terms of "recognizing, generating and disseminating market insight to ensure better market-related decisions".
Corporate social responsibility (CSR) or corporate social impact is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in, with, or supporting professional service volunteering through pro bono programs, community development, administering monetary grants to non-profit organizations for the public benefit, or to conduct ethically oriented business and investment practices. While once it was possible to describe CSR as an internal organizational policy or a corporate ethic strategy similar to what is now known today as Environmental, Social, Governance (ESG); that time has passed as various companies have pledged to go beyond that or have been mandated or incentivized by governments to have a better impact on the surrounding community. In addition, national and international standards, laws, and business models have been developed to facilitate and incentivize this phenomenon. Various organizations have used their authority to push it beyond individual or industry-wide initiatives. In contrast, it has been considered a form of corporate self-regulation for some time, over the last decade or so it has moved considerably from voluntary decisions at the level of individual organizations to mandatory schemes at regional, national, and international levels. Moreover, scholars and firms are using the term "creating shared value", an extension of corporate social responsibility, to explain ways of doing business in a socially responsible way while making profits.
Relationship marketing is a form of marketing developed from direct response marketing campaigns that emphasizes customer retention and satisfaction rather than sales transactions. It differentiates from other forms of marketing in that it recognises the long-term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages. With the growth of the Internet and mobile platforms, relationship marketing has continued to evolve as technology opens more collaborative and social communication channels such as tools for managing relationships with customers that go beyond demographics and customer service data collection. Relationship marketing extends to include inbound marketing, a combination of search optimization and strategic content, public relations, social media and application development.
A strategic alliance is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations.
The stakeholder theory is a theory of organizational management and business ethics that accounts for multiple constituencies impacted by business entities like employees, suppliers, local communities, creditors, and others. It addresses morals and values in managing an organization, such as those related to corporate social responsibility, market economy, and social contract theory.
A sustainable business, or a green business, is an enterprise which has a minimal negative impact or potentially a positive effect on the global or local environment, community, society, or economy—a business that attempts to meet the triple bottom line. They cluster under different groupings and the whole is sometimes referred to as "green capitalism". Often, sustainable businesses have progressive environmental and human rights policies. In general, a business is described as green if it matches the following four criteria:
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. Internal auditing might achieve this goal by providing insight and recommendations based on analyses and assessments of data and business processes. With commitment to integrity and accountability, internal auditing provides value to governing bodies and senior management as an objective source of independent advice. Professionals called internal auditors are employed by organizations to perform the internal auditing activity.
Strategic communication can mean either communicating a concept, a process, or data that satisfies a long-term strategic goal of an organization by allowing the facilitation of advanced planning or communicating over long distances, usually using international telecommunications or dedicated global network assets to coordinate actions and activities of operationally significant commercial, non-commercial, and military business or combat and logistic subunits. It can also mean the related function within an organization, which handles internal and external communication processes. Strategic communication can also be used for political warfare.
Growth platforms are specific initiatives selected by a business organization to increase their revenue and earnings growth. There are two types of growth platforms: strategic or tactical. Strategic growth platforms usually take from 3 to 6 years to implement and give the desired results being long term initiatives. On the other hand, Tactical growth platforms take less time to implement as they are shorter term initiatives and both the initiative and the results are based on the current budget year of the particular business.
Business networking is the practice of building relationships with individuals and businesses for professional purposes. It involves the strategic exchange of information and resources to create connections that can be mutually beneficial. Business networking can be conducted in person, online, or through a combination of both. Through repeated interactions, companies create deeper connections. This encourages knowledge exchange, mutual adaptation, and a commitment of resources, which can be both financial and social, to one another.
Robert Edward Freeman is an American philosopher and professor of business administration at the Darden School of the University of Virginia, particularly known for his work on stakeholder theory (1984) and on business ethics.
Organizational ethics is the ethics of an organization, and it is how an organization responds to an internal or external stimulus. Organizational ethics is interdependent with the organizational culture. Although it is to both organizational behavior and industrial and organizational psychology as well as business ethics on the micro and macro levels, organizational ethics is neither organizational behavior nor industrial and organizational psychology, nor is it solely business ethics. Organizational ethics express the values of an organization to its employees and/or other entities irrespective of governmental and/or regulatory laws.
Stakeholder management is a critical component in the successful delivery of any project, programme or activity. A stakeholder is any individual, group or organization that can affect, be affected by, or perceive itself to be affected by a programme.
A socially responsible business (SRB) is a generally for-profit venture that seeks to leverage business for a more just and sustainable world. The objective of the SRBs involves more than just maximizing profits for the shareholders; it is also about creating positive changes and making valuable contributions to the stakeholders such as the local community, customers, and staff. In other words, the SRB is both profit-oriented and socially responsible as these companies seek to make financial gains, and at the same time, aim to improve the well being of the community. In doing so, the businesses engage in the voluntary initiatives with the aims of improving in various areas ranging from the social to environmental aspects of the society.
Values-based innovation is a theoretical concept and managerial approach that “understands and applies individual, organisational, societal, and global values, and corresponding normative orientations as a basis for innovation”. It demonstrates the potential of values to integrate diverse stakeholders into innovation processes, to direct collaborative efforts, and to generate innovations with a positive impact on societal challenges. It elaborates upon the interrelations between innovation management, an established management practice and field of research, and values-based management, which is generally dealt with in business ethics and focuses on the ethical concerns related to corporate management.
Business development (BD) involves all activities, developing products and technologies so that they can be commercialized, building relationships with potential partners
