Expansion of Business
New business development concerns all the activities involved in realizing new business opportunities, including product or service design, business model design, and marketing. When splitting business development into two parts, we have: ‘businesses and ‘development’. The first things that come into mind when looking at business are: economics, finance, managerial activities, competition, prices, marketing, etc. All of these keywords are related to risk and entrepreneurship and clearly indicate the primary scope of the term ‘business development’. Development is very abstract and can be linked with some of the following keywords: technological improvement, cost reduction, general welfare, improved relations, movement in a (positive) direction, etc.
In the traditional definition of Business development, 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. Since this definition is limited and lacks some essential factors in business developing, a complete new definition of Business Development will be introduced. Of course, the theory on “traditional” marketing is still correct and can be adopted from the old definition. 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.
Technology of business
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. Continuous investment in innovation for both products and processes makes it more difficult for others to offer a large technological functionality advantage. 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
Traditional marketing is usually based on economic models. 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. 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. 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.
Relationships are usually based on resource ties, activity links and/or actor bonds. A company should therefore analyse 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. In this way, business development can be established with help of this business network.