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New business development concerns all the activities involved in the creation of a new enterprise and in realizing new business opportunities, including product or service design, business model design, and marketing.
In the traditional definition of business development, new business development is mostly seen as growing an enterprise, with a number of techniques. The mentioned techniques differ, but in fact all of them are about traditional marketing. The main question in these issues is: how to find, reach and approach customers and how to make/keep them satisfied, possibly with new products. [1] When supplying a solution, it is important to focus on the total offering you give instead of only focusing on the product or service. An offering is a package consisting of different proportions of physical product, service, advice, delivery and the costs, including price that are involved in using it. Hereby the advice, adaptation to the customer and the costs are the most important factors to get the right combination within the offering. [2]
Drawing on contingency theory, an idea central to new business development is that different product-market- technology combinations can require different marketing strategies and business models to make them a success (Tidd et al., 2005). To chart the factors that are involved and create synergy between them, new business development draws heavily upon the fields of technology and business networks. The new business development process is to recognize chances and opportunities in a fast changing technological environment. Often uncertainty arises because of new technology and their new markets.
Innovative technology provide important opportunities for new business development. For a company it is important to keep products and processes up to date, to stay competitive (Ford et al., 2006). Continuous investment in innovation for both products and processes makes it more difficult for others to offer a large technological functionality advantage (Schilling, 2003). Many companies need technological development to stay competitive. Technological development can occur through making decisions about acquiring, exploiting and managing technologies. These decisions should be made by involving the research and development staff, purchasing staff and marketers. (Ford et al., 2006) The customers are also important (Schilling, 2003; Ford et al., 2006).
Furthermore, technology can be analyzed by the concept/framework of value configuration as introduced by Norwegian academics Stabell and Fjedstad (1998). [3] The framework consists of three value configurations, which are an extension of the value chain model developed by Michael Porter:
These configurations overcome some of the issues with the traditional value chain model, which is only helpful for traditional manufacturing companies. In practice, firms are not pure instances of a single distinct value configuration, multiple combinations of configurations can be found within one firm.
The value creation process can also be understood from the perspective of Schilling. Schilling talks about value in the sense of technological functionality, installed base and complementary goods of a product. (Schilling, 2003). It may be clear that technology plays an important role in this value creation process, and in general contributes to the process of renewing the match between problem and solution.
Traditional marketing is usually based on economic models (Williamson, 1975). In those pure economic models there is no room for negotiations or special treatment for different companies. A technological environment, however, can be very uncertain and therefore competitors have to rely heavily on their business networks. It is then that special treatments and negotiations are necessary.
It is important to recognize the effect social relations have on economic action, including business development (Ford et al., 2006). Granovetter also argues that social relations in a network lead to trust between partners, an important factor for stable development in a dynamic environment. By focusing on these new activities, it becomes difficult to keep every activity up-to-date and to maintain the competitive advantage (Ford et al., 2006). Companies therefore increasingly concentrate their investment and their activities on only a few activities which they believe to be their core business, otherwise their competitive advantage is easily lost. Because they concentrate on just a few activities, they need business relations for the other activities (Ford et al., 2006).
Relationships are usually based on resource ties, activity links and/or actor bonds (Ford et al., 2006). A company should therefore analyze their firm itself, their relationships and their business networks in terms of activities, actors and resources. In this way, a company can determine where there are new opportunities for relationships and where resources, technologies and/or skills can be developed, integrated or exploited from other companies (Ford et al., 2006). In this way, business development can be established with help of this business network.
Nowadays, marketing is about the exchange of heterogeneous resources between dynamic, cooperating partners in network-like structures (Hakansson et al., 2004). It is about relationships, not about selling products. So, business marketers should be busy finding, developing and managing of relationships within the complex network that surrounds them (Ford et al., 2006). Blois (2004) provides three ways in which a firm can evolve from market to network mechanism. These are entrepreneurial alertness (being alert to value-creating opportunities), path dependence (historical events cause solutions to problems and become “locked in”) and replaceability (irreplaceable contributors get much attention of others trying to influence them).
It is still questionable to what extent these networks are involved by social relations, since the mentioned authors do not agree on this. Therefore, enterprises have to cope with the problem of how to maintain their network contacts.
Cost pressures and cash flow concerns, in the sense of having sufficient cash and liquid assets to be able to meet current costs, are important factors influencing the pace of new business development, and may impact on the opportunities which can be accessed. Byron Dixon, CEO of a small business, recalled that "when we start businesses, being skint in the early days is tough, and every day is a struggle". He notes, as an example, that "the biggest kids' footwear retailer in the UK is Clarks, and that is one of the only companies that we don't deal with now because, at the time, I couldn't afford to drive to its offices, which today seems bizarre". [4]
In commerce, supply chain management (SCM) deals with a system of procurement, operations management, logistics and marketing channels, through which raw materials can be developed into finished products and delivered to their end customers. A more narrow definition of supply chain management is the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronising supply with demand and measuring performance globally". This can include the movement and storage of raw materials, work-in-process inventory, finished goods, and end to end order fulfilment from the point of origin to the point of consumption. Interconnected, interrelated or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply chain.
In business theory, disruptive innovation is innovation that creates a new market and value network or enters at the bottom of an existing market and eventually displaces established market-leading firms, products, and alliances. The term, "disruptive innovation" was popularized by the American academic Clayton Christensen and his collaborators beginning in 1995, but the concept had been previously described in Richard N. Foster's book "Innovation: The Attacker's Advantage" and in the paper Strategic Responses to Technological Threats.
A business model describes how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. For a business, it describes the specific way in which it conducts itself, spends, and earns money in a way that generates profit. The process of business model construction and modification is also called business model innovation and forms a part of business strategy.
In business and engineering, product development or new product development covers the complete process of bringing a new product to market, renewing an existing product and introducing a product in a new market. A central aspect of NPD is product design, along with various business considerations. New product development is described broadly as the transformation of a market opportunity into a product available for sale. The products developed by an organisation provide the means for it to generate income. For many technology-intensive firms their approach is based on exploiting technological innovation in a rapidly changing market.
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.
In business, a competitive advantage is an attribute that allows an organization to outperform its competitors.
A core competency is a concept in management theory introduced by C. K. Prahalad and Gary Hamel. It can be defined as "a harmonized combination of multiple resources and skills that distinguish a firm in the marketplace" and therefore are the foundation of companies' competitiveness.
A value chain is a progression of activities that a business or firm performs in order to deliver goods and services of value to an end customer. The concept comes from the field of business management and was first described by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.
The idea of [Porter's Value Chain] is based on the process view of organizations, the idea of seeing a manufacturing organization as a system, made up of subsystems each with inputs, transformation processes and outputs. Inputs, transformation processes, and outputs involve the acquisition and consumption of resources – money, labour, materials, equipment, buildings, land, administration and management. How value chain activities are carried out determines costs and affects profits.
A strategic partnership is a relationship between two commercial enterprises, usually formalized by one or more business contracts. A strategic partnership will usually fall short of a legal partnership entity, agency, or corporate affiliate relationship. Strategic partnerships can take on various forms from shake hand agreements, contractual cooperation's all the way to equity alliances, either the formation of a joint venture or cross-holdings in each other.
There is no agreed definition of value networks. A general definition that subsumes the other definitions is that a value network is a network of roles linked by interactions in which economic entities engage in both tangible and intangible exchanges to achieve economic or social good. This is close to the definition of Verna Allee, see below. Here are a few definitions that provide different perspectives on the general concept of a value network.
Mobile business development is a category of business development which focuses on attracting new customers in the Mobile Web markets. There are large efforts being made to make innovative mobile ICT services work. Examples of these services include mobile tourist guides and shopping guides for potential consumers. As an emerging trend, technology and service providers combine their expertise and resources to design these services. This incorporates designing several models: the Value network, a Value proposition, a Revenue model and a Technological architecture.
The eCRM or electronic customer relationship management coined by Oscar Gomes encompasses all standard CRM functions with the use of the net environment i.e., intranet, extranet and internet. Electronic CRM concerns all forms of managing relationships with customers through the use of information technology (IT).
The following outline is provided as an overview of and topical guide to marketing:
Service innovation is used to refer to many things. These include but not limited to:
Market environment and business environment are marketing terms that refer to factors and forces that affect a firm's ability to build and maintain successful customer relationships. The business environment has been defined as "the totality of physical and social factors that are taken directly into consideration in the decision-making behaviour of individuals in the organisation."
A business network is a complex, enduring, and interdependent web of business relationships among market and non-market actors that allow firms to co-create value in their business environment. Firms influence their markets by managing and signalling their network positions, facilitating entry of new actors, or removing other actors, for instance, through disintermediation, which means elimitating the middleman.
Customer experience, sometimes abbreviated to CX, is the totality of cognitive, affective, sensory, and behavioral customer responses during all stages of the consumption process including pre-purchase, consumption, and post-purchase stages.
Value chain management capability refers to an organisation's capacity to manage the internationally dispersed activities and partners that are part of its value chain. It is found to consist of an international orientation, network capability, market orientation, technological capability and teamwork management capability. Value chain management capability is a higher level capability that draws together a variety of lower level capabilities.
Håkan Håkansson is a Swedish organizational theorist, and Professor of International Management at the BI Norwegian Business School, known for his work on business networks.
David Ford is a British organizational theorist, Professor Emeritus at the University of Bath School of Management, and co-founder of the International Marketing and Purchasing Group in the mid 1970s. He is known for his work with Håkan Håkansson on business networks.