ABSTRACT
Key business issues Section
O Development of new services is not the only route to business development. New markets for existing services may give quicker returns, lower cost and less risk, even though the work is technically unexciting 11.1
O The marketing cost of innovation may exceed the technical cost and should be included in the appraisal process 11.2
o Differentiation should be built in at the concept stage
o More new services fail for marketing reasons than for technical reasons
o Proposals for new services or new markets should be put through policy, marketing, financial, management and technical filters before expenditure is approved 11.3
o Probable winners should be identified as early as possible. We should not ‘start developing now, think about the market later’ 11.4
o Income and expenditure forecasts for new services should be analysed for risk and sensitivity 11.5
o Delay in time to market can make a project unprofitable. Management attention is often directed at the wrong areas
o Impending failure should be recognized, and projects terminated before even more money is wasted 11.6
o Unwillingness to ‘lose face’ inside the company or at corporate level is a common cause of wasted investment
Ansoff (1988) defines a diversification matrix which offers four possible strategic options for business development.
