Business development strategy – Hello, Sinaumed’s friends , Did you know? Indonesian small and medium enterprises have recently experienced rapid growth. It is recorded that there are 3.79 million MSMEs using digital technology in their business processes.
Using digital technology in an effort to help businesses grow in this technological era. Therefore, the role of micro, small and medium enterprises (MSMEs) in Indonesia is quite important in contributing to national economic growth.
This proves that the Indonesian people understand that running SMEs at a time like this can be a very promising opportunity, especially if it is managed with the right business development strategy. The larger business development strategy is not easy, there are many aspects that need to be properly considered so that business development can run smoothly.
Therefore, you need to know the business development strategies that can be applied to develop your small and medium businesses. Here are some business development strategies that you can apply to grow your business. Before discussing business development strategies, let’s find out the definition of strategy first, see the explanation!
Understanding Strategy from Several Experts
Strategy comes from the Greek strategos andstrategos , which means knowledge and art regarding the available resources of an effort to achieve certain desired goals (Chandradhy in Zulham, 2011): 32 ) . The literal meaning of the Greek term is “the words of an army general”, before finally changing the meaning as mentioned above (Garratt, 2005:29) .
Strategy is a model of goals and grand policies as well as plans for achieving these goals, arranged in such a way so as to determine what business or business will be what, and what business he has or what business he wants (Anthony in Elhamma, 2013: 2 ) .
Strategy must provide boundaries for a project, where goals and results must follow the direction of the business in the future (Longman and Mullins, 2004:57). According to Jauch and Glueck (1988:9) , strategy is an integrated, broad and integrated plan that links the company’s strategic advantages and environmental challenges to ensure that the company’s main goals can be achieved by good organizational performance.
The “unified” nature implies that strategy becomes the tool that unites the entire organization into one unit. The “broad” characterization implies that strategy covers all the important aspects of the organization. The “integrated” nature implies that strategy is an interconnected plan.
According to Porter (1997:68) , strategy is the creation of a unique and valuable position, which consists of a series of different activities. Thus, corporate strategy can be implemented to perform activities that are different from competitors or to perform similar activities in different ways.
Supporting the above definition, Casadesus-Masanell and Ricart (2009:2) say that strategy refers to the choice of business models adopted by companies to compete in the market. Strategy is a plan of urgent action – which can change depending on the situation – to achieve certain goals (Casadesus-Masanell and Richard, 2009: 16).
Business strategy develops from time to time. Different companies are taught to analyze the competitive environment, determine company positioning, develop competitive advantages and business advantages, and recognize threats to companies to maintain corporate sustainability (Casadesus-Masanell and Richard, 2009:1)
Strategies must be flexible in a dynamic and uncertain world, and cannot be fixed permanently because unexpected disruptions or obstacles in the business environment can make strategies ineffective, even when preparations have been made with the greatest care (Garratt, 2005:9) .
Academics and practitioners use various approaches to define competition and business strategy, including industrial organization, resource-based perspectives, dynamic competencies, and game theory (Casadesus-Masanell and Richard, 2009:1).
Based on the definitions above, it seems that the strategy refers to the plans and activities of the company that are adjusted by the management in optimally utilizing the company’s resources to achieve ‘corporate’ goals. Each company can determine a different strategy, depending on the advantages and uniqueness of the company’s resources. The following is an explanation of the meaning of business development
Definition of Business Development
Sustainable business development is the focus of the company’s attention, which can be achieved by adopting business strategies and practices that are tailored to the needs of the company and its shareholders, while protecting, maintaining and strengthening the resources needed for the company.
The concept of business development emerged from the private sector, with a focus on efforts to identify business opportunities in the market. In general, the purpose of business development is to generate profits through business establishment to take advantage of markets and business opportunities, as well as create jobs (Central Otago District Center, 2013: 5).
Business development is any activity that enhances or aims to increase – the profit, production or service potential of a business. Furthermore, business development can be interpreted as an investment or time that has an impact on business growth and expansion.
Business development is the process of driving the business to the point where the business can provide goods and services to all external parties who need them. In the aspect of business marketing, business development is a promotional process to build and maintain working relationships that are aligned with business goals (Kind and Knyphausen-Aufseß, 2007:177).
Business development covers all company activities aimed at:
- create value and potential income for the company;
- developing products and technologies that can be commercialized; And
- build relationships with partners, consumers and potential stakeholders, for the benefit of the company.
Definition of Business Development Strategy
Combined with the previous definitions, it can be concluded that a business development strategy is a set of company objectives, policies, plans and activities aimed at identifying business opportunities in the market and maintaining business or achieving commercial success.
The business development strategy is part of the business strategy and cannot be separated from the business model. To grow a business in a sustainable manner, companies must continuously evaluate their business strategy. Business strategy analysis is an important step in designing a viable business model, so that it has a lasting impact on the life of the business.
A business development strategy must have the following qualities: consistency , consonance , advantage and feasibility .
- Consistency quality means that the business development strategy must include consistent goals and policies.
- consonance means that the strategy must reflect the company’s adaptive response to the external environment and the changes that occur there.
- Advantage means that the business strategy must provide a place to create or increase competitive advantage in the field of life.
- Feasibility implies that the business strategy must not exceed available resources or create unsolvable problems.
Business Development Strategy Steps
In developing a business strategy, several steps must be taken.
1. The first step is to analyze the company’s internal and external environment. Company management must observe opportunities and threats in the external environment, including consumer needs, competitors’ actions, expectations, and capabilities.
From an internal perspective, the company needs to be aware of its skills and resources, including the company’s location, its strengths in product quality and delivery, and the company’s financial resources.
2. The second step is synthesis and evaluation. At the aggregation stage, the company must collect all the data obtained from the results of the analysis and develop alternative strategies that can be acted upon. These should then be evaluated using various financial and qualitative criteria. The selected strategy is subdivided into substrates for different functional domains.
3. Entering the third step , the company must develop a functional strategy, in which the company’s grand strategy is reflected in the functional area strategy with shorter, concise and clear objectives, as well as time limits so that it is more tactical.
Functional areas that can be used in strategy development include: marketing, product development, operations and finance. At this stage, the business must also review the functional strategy used, because basically there are cross-functional relationships. This is done to avoid strategic execution of one functional area beyond the capabilities of the other functional areas involved.
4. The fourth step is executing the strategy. It should be emphasized first that the implementation of the strategy does not necessarily follow the plan. Many factors affect the results of strategy implementation, for example finance, competitor decisions, control systems, leadership and motivation of everyone in the company.
As part of business development, several products can be developed, including: goods or physical products, such as food, goods, clothing, housing, equipment, etc. Other products are services or products that are not physically tangible, for example hotels, airlines, rental services, barbers, beauty salons, etc. Other products include: events, people, places, property or assets, organizations, information and ideas.
How to Implement a Business Development Strategy
1. Utilizing Social Media
One simple way to grow a business is to use social media as a business growth strategy. In today’s digital era, the role of social networks is very important because almost everyone has a social network, so your chances of getting customers will certainly be higher.
Moreover, social media can be used by anyone for free, so you can advertise by creating an attractive profile so that potential customers are interested in buying your product. If you want to reach a wider market, you can use social media advertising features to promote your business. Of course, this feature is a paid feature, so you must be prepared to spend a certain amount of budget for promotion.
2. Perform Periodic Innovations
Customers tend to get bored and always want to try something new. One of the business development strategies that you can apply to retain customers is to innovate in your business. This is an important thing to do, especially if your business has many competitors.
Usually an industry has its own trend. As a business owner, you have to pay attention to consumer trends and try to innovate your products. Grow your business with new innovations while maintaining product quality so that your customers remain loyal to your business.
3. Get to know your business competitors
Naturally, if there are competitors in the business, there may be tens or even thousands of companies that have the same product as the product you are marketing. When running a business, you need to know who your competitors are, as well as the strengths and weaknesses of your business competitors. Competition in business is natural, so you need to have something that differentiates your business from competitors so that your business can continue to grow.
4. Using Loan Funds for Business
Using borrowed capital is a rather complicated business strategy to implement in business. If you are not careful in using a loan, the possibility of bankruptcy may arise. However, if limited business capital is an obstacle to your business, this can be a consideration.
To get a loan, you can apply for a loan from a bank, but some of the conditions are quite difficult to fulfill. Another way is to apply for a Peer-to-Peer Lending (P2P) loan. Currently, there are many ways to get a loan. Use the money for priority issues such as adding production equipment or adding branches in new locations.
5. Choosing the Right Location
Even though many SMEs are turning to digital, this is not inferior to SMEs that still have physical stores. For small and medium businesses that have physical stores, location is one of the most important aspects in developing a business. With strategic positioning, of course, it will greatly affect the company’s operations.
Choose a location that is easy for customers to reach, but also close to the location of raw materials. If you choose a location that is easily accessible, customers can find your business more easily and you are more likely to acquire new customers.
6. Expanding the Network
Network expansion can be done by expanding marketing. You can open new marketing channels or create new branches. If you have an offline store, you can try new ways of marketing online and vice versa. If advertising on one platform isn’t profitable enough, try another, more effective platform.
Of course, this expansion must be accompanied by an increase in material supply and production. Another example of network expansion is improving business relationships. Build your network by getting to know lots of people. Work together and maintain good relations because one day you may need their help.
7. Upgrade Resources
Overall improvement of resources is carried out, both product resources and human resources. Increasing product resources is achieved by paying attention to the use of materials and processes applied to make an item. The better the resources used, the higher the quality of the product that will be produced. In terms of human resources, the first step that can be taken is to choose a reliable team and employees.
See how your team and employees work together or when dealing with consumers. Serving customers with a friendly attitude. Quality products coupled with good service will definitely keep consumers from trying to come back another time.
8. Prioritizing Consumer Service
If human resources is going well, customer service is also an important aspect that you should pay attention to. This point is important because excellent customer service is the best way to keep them engaged with your brand. It’s no wonder that high quality customer service has to be maintained when many changes need to be made.
Utilizing the digital world to maintain good relations with consumers. Provide updates about your product or service. Plus, make a good impression by being friendly in service, answering customer questions, providing solutions, and offering assistance. Apart from that, you also have to be able to educate consumers well.
9. Minimizing Operational Costs
The goal of starting a business is to reduce costs and get maximum profits. Don’t take pegs bigger than the stake. Therefore, you really need to pay attention to the capital and operational costs incurred as well as the income generated. This is done to ensure that the needs that the business is meeting are aligned with what needs to be achieved to generate growth.
10. Investment
If saving alone isn’t enough, you need to find ways to grow your business so that the profits you generate can continue to grow. One way that can be done is by investing.
Currently, there are many investment vehicles, whether you have large or small capital.
You can invest in stocks, mutual funds, real estate, gold, time deposits and many other types of investments. Before that, be sure to read complete information about the investment you are about to make. Do not let the intention to seek profit lead to losses.
You can start doing some of the business development strategies above so that your business can grow and progress.