BUSINESS DEVELOPMENT

Business development is at the heart of strategic thinking and needs imagination and innovation. It should be proactive and anticipatory. It involves the creation of a unique configuration of the company’s key features, which will match the challenges of its environment and provides strategic advantage. There are two distinct phases:

1. The option generation phase, where creativity must be allowed to flourish and diverse ideas emerge.
2. The option selection phase, where the options are narrowed down through a systematic filtering process.

The process is often iterative with multiple cycles occurring through the two phases.

In the first phase we work with the company’s management team, engaging in the spirit of divergent thought and experimenting with ideas. We consider external environmental factors (Political, Economic, Social and Technological – PEST) to generate new ideas as a foundation for exploration at this stage. In the second phase, we systematically examine the options generated and compare them against information gathered about external environment. Projected figures are produced and risk assessment is performed.

Option Generation

We use SWOT (Strengths, Weakness, Opportunities and Threats) analysis (matrix) as broad framework, which will act as a foundation for creative thinking.

Target Costing

When appropriate we adopt target costing over traditional costing methods.

Target costing is a Japanese response, gaining acceptance in the west, to the challenge of rapidly changing competitive environments.

Product life cycles are becoming shorter, process methods are increasingly automated and designed to offer a flexible approach to product definition. It has also been argued that as much as 80% of a product’s cost is determined before manufacture begins. Consequently the ability to generate reductions in product cost once a product is launched is severely curtailed.

In a highly competitive global marketplace, the traditional western approach to product cost definition is seen as inadequate. Target casting throws conventional logic on its head. Instead it asks first “what is a competitive market price?” then, a process of subtraction defines the target cost:

Target cost = Target selling price – Required profit.

Option Selection

To reduce the risk of deterioration of the strategic process strategic options are screened against a range of criteria which includes:

• Shareholder expectations
• Financial return
• Risk
• Compatibility

Summary

We work on the principle that you know your business more that anyone else, thus, rather than writing a fat report that will be filed away to gather dust, we adopt an “empowering” approach that includes full implementation and fostering of long-term relationship.

We recognise that rigorous analysis only provides the window to the creative process, what follows includes:

• The testing of ideas that emerge.
• To work out their strategic implications.
• To ensure successful implementation.

We cannot cover all strategic options and management tools that are incumbent in the area of business development; any attempt to do so would be futile. Business development is not a theoretical approach devised by Business Schools, rather it is drive for real achievement that addresses real business issues faced by owners.

Business Development Report by Jay Abraham - business builder par excellent

Strategic planning

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