Business Development Flashcards
What is Business Development?
Business development is creating long-term value for an organization from customers, markets, and relationships
BD is all about creating opportunities to pursue value
Economic Value
The fundamental way we think of value in the context of business - increased revenues/profits
Brand Value
The overall benefit of changing the perception of the company in the eyes of our partners, customers, and prospective customers
Product Value
The increase of intrinsic utility of a product or service
Increasing product value allows you to increase price, attract new customers, or keep more of existing customers
Audience Value
A type of potential value realized by increasing a company or product’s exposure
Option Value
The value derived from retaining a future choice that has potential to be valuable in its own right
What are the sources of Value?
Customers, markets, and relationships
What are the types of Value?
Economic, brand, product, audience, option
Markets
Where your current and perspective customers live
There are two kinds of markets:
- Geographical markets (NY or LA)
- Value mindset markets (pet-owners)
What functions is BD composed of?
Sales, strategy, partnerships, and relationship management
Sales in BD
Instead of selling a specific product, you are selling the idea that a partnership will bring value to both parties
Strategy in BD
Strategic thinking is necessary for figuring out the best paths for reaching new customers and for entering new markets
Most prevalent in the build v. buy v. partner consideration
Partnerships in BD
Generally, the fastest, cheapest, and easiest way to reach new customers and markets
Distribution (channel) partnerships
When one company has access to a market that the other is looking to connect with
Product Partnerships
When two companies work together to create a new product, or enhance an existing product
Brand Partnerships
When companies work together to jointly promote and cross-promote their products and services
Relationship Management
BD people must know how to build and manage relationships with stakeholders
All relationships require two things:
- Strong foundation of trust, respect, and integrity
- Mutually beneficial exchange of value
3 Steps in Determining Opportunity Viability
- Identify the opportunity
- Assess the opportunity
- Evaluate the paths
Identify the opportunity
The process of thinking about your business and identifying ways to create more value from CM&Rs
Any gaps compared to competition? Additional products or features? Competition areas of strength? Something to do better? How to enter a new market?
Assess the opportunity
There are two key parts to any opportunity, the benefits and the costs
- The benefits are quantified based on the assumptions in value derived from the opportunity
- The costs are a function of the resources spent in pursuit of the opportunity
- Also consider the opportunity cost
Evaluate the paths
he way that the opportunity ultimately becomes a reality; takes place in three forms:
Build - Slowest, most control, resource intensive
Buy - Potentially fastest, maintain control, risky and expensive
Partner - Fast, lose some control, shared risk and less expensive
Why should companies invest in business development?
Partnering is the fastest, most-effective, lowest risk way to solve for an area of weaknesses
Reasons to partner:
- Increased revenue as a result of being able to offer customers a fuller and more complete solution.
- Reduced Costs
-lower cost parts of the whole product solution from a
larger partner’s economies of scale
-reduce market entry and development costs through
extension of company’s organic distribution systems
-New knowledge, skills sets and opportunities to your
organization fast
- Expanded reach and market share resulting from access to the larger company’s sales force/channels.
- A boost in credibility, brand, and product exposure
- Defense mechanism so your competition can’t partner
with them
When Should Companies Invest in Business Development?
When they have achieved the following:
- A working product
- Product market fit
- Internal resources to support initiatives
- Market Leverage - Why Me?
- Ability to operate solo
Four common types of BD relationships
Product - relationships that enhance the end product
Distribution - provides distribution for your product/service
Brand - relationships that enhance the brand
Channel - partners with a company, to market and sell a product
