How Do I Start a Holistic Business?

Since the 1970s, economic development in the western world has been slowing down, and new changes have taken place in the operating environment of enterprises. Therefore, in order to survive and develop, enterprises must adapt to changes in the operating environment, change their respective operating structures, and seek the development of new businesses. In order to achieve this goal, it is necessary to carefully predict the future changes in the environment, analyze the company's capabilities and performance, set the long-term development direction and goals according to the company's basic policy, and based on this, formulate timely management plans New business plan with adaptive environment.

New business plan

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Since the 1970s, economic development in the western world has been slowing down, and new changes have taken place in the operating environment of enterprises. Therefore, in order to survive and develop, enterprises must adapt to changes in the operating environment, change their respective operating structures, and seek the development of new businesses. In order to achieve this goal, it is necessary to carefully predict the future changes in the environment, analyze the company's capabilities and performance, set the long-term development direction and goals according to the company's basic policy, and based on this, formulate timely management plans New business plan with adaptive environment.

The essence of a company's new business plan is its development strategy. It is the formulation of long-term business policies and strategies that affect the overall and future development of the enterprise in terms of its future development direction, business area, business scale and business results. Therefore, the formulation of a new business plan for an enterprise should be based on the analysis of the corporate environment and the analysis of corporate capabilities. And based on achieving long-term stability.

Chinese name

New business plan

Make

Enterprise Environmental Analysis

Strategic goal setting

Profitable goal

development strategy

Market penetration strategy

Formulation of a new business plan

The general methodology and procedures for developing a new business plan are outlined below.

1. Enterprise Environmental Analysis

The survival and development of an enterprise are closely related to the actual corporate environment and future changes in the environment. Therefore, for enterprises, grasping the current situation of the environment and future changes, and using opportunities that are conducive to the development of enterprises, and avoiding threats, are the most important issues for survival and development.

There are many factors that make up the corporate environment. It can be composed of main environmental factors, general environmental factors and regional environmental factors. The main environmental factors of an enterprise refer to individuals and groups that have an interest in the business results of the enterprise, such as shareholders, customers, financial institutions, transaction-related units, competing enterprises, and external organizations. The general factors of the corporate environment are composed of social factors such as social political factors, economic factors, cultural factors, and scientific and technological factors. The regional environmental factor refers to the geographical location generated by the above environmental factors, and it includes domestic environmental factors and international environmental factors.

For a specific company, from the perspective of time, cost and necessity, it is not only impossible, but also it is not necessary to analyze all environmental factors. Therefore, we must first determine the specific environmental content of a specific enterprise, then focus on manpower and expenses, and investigate and analyze the factors that have a greater impact. Western companies attach great importance to predicting the time and direction of changes in future factors, which is the conclusion of environmental analysis. Environmental analysis must finally answer: When will environmental factors begin to change? How likely is it to happen? Is this change an opportunity for growth or a threat? How much impact will it have on the business? What countermeasures should be taken? It can be seen that environmental analysis is the fundamental guarantee for formulating the correct corporate development strategy. In addition, in order to formulate a new product market development strategy, an enterprise group that has a competitive relationship with the products provided by the enterprise to the market should be analyzed in order to use it as a basis for selecting a plan.

2. Enterprise capability analysis and performance analysis

On the basis of environmental analysis, companies should do a good job of capacity analysis, predict the degree to which the company's existing capabilities adapt to the future environment, identify the strengths and weaknesses of the company, and "know oneself and the other," so that the company's development strategy and new business The plan is built on a solid foundation. Otherwise, companies will lose their ability to compete and their new business development will fail. Therefore, enterprise capability analysis is one of the important prerequisites for formulating a new business development strategy.

The basic point of enterprise capability analysis is to compare the existing enterprise capabilities with the capabilities necessary for new business activities, find the gap between the two, and formulate a strategic plan to improve the enterprise capabilities so that the new business plan of the enterprise can be successfully realized. To this end, the analysis of corporate capabilities must first clarify the structure of corporate capabilities, that is, the factors that reflect corporate capabilities. Enterprises should classify their capabilities according to their actual conditions, so that they can systematically grasp their capabilities. Secondly, on the basis of classification, to effectively grasp the actual situation of the existing capabilities of the enterprise, which is related to the rationality of the development strategy plan, so it is the key to the analysis of enterprise capabilities. Then through the evaluation of the company's capabilities, it finds the problems existing in the company's existing capabilities, and clarifies the advantages and disadvantages of the company. As for the evaluation of corporate capabilities, Western countries are currently in the development stage, so various methods have emerged at the same time. The overall evaluation idea is to compare the existing enterprise capabilities with those required by a benchmark. The difficulty of evaluation lies in the selection of evaluation criteria. There are currently two kinds of benchmarks: one is the subjective benchmark, that is, the ideal ability of the enterprise set by the evaluator; the second is the objective benchmark, that is, the ability of the excellent enterprise in the competitive enterprise or other industries.

Enterprise performance analysis refers to predicting the operating results that an enterprise can achieve in the future changing operating environment while maintaining its existing capabilities. Obviously, the predicted value of this kind of business results generally does not reach the long-term target value of the enterprise, which puts forward requirements for the operators of the enterprise: the business structure of the enterprise must be reformed to adapt to the changing environment. Otherwise, it is difficult to achieve the strategic goals of enterprise development, and the enterprise is even in danger of being eliminated. Enabling managers to increase their sense of crisis and actively turn their attention to the study of corporate strategic directions. This is the purpose and significance of corporate performance analysis.

3 Setting of strategic goals

The formulation of any plan needs to be based on certain goals. An enterprise's new business plan is a strategic development plan with a long-term perspective. Therefore, an enterprise must determine long-term strategic goals as the basis for formulating a development plan.

The setting of strategic goals should, in principle, be based on the needs of adapting to environmental changes and the capabilities of enterprises. However, the main target projects of enterprises in determining the target system are different due to the different content of the projects proposed by different researchers, but the basic project content is basically the same. For example, as an enterprise business development plan, the quantitative goals that reflect the future business results of the plan generally include three objectives: profitability, growth, and safety.

(1) Profitable goals. The most commonly used target items are total capital profit margin, sales profit margin, sales turnover rate, etc.

(2) Growth goals. The main items are sales growth rate, market share, and profit growth rate.

(3) Security objectives. The main projects include own capital ratio, value-added growth rate, and break-even point.

The target values of the above-mentioned target projects are often set abroad using social average values, excellent companies in the same industry, and similar international excellent companies as reference standards. In general, set the target value higher than the social average, and try to challenge the benchmark of outstanding companies in the same industry as much as possible. This is conducive to maintaining the competitiveness of the enterprise, and it is also conducive to judging whether the operation of the operator is successful.

4 Formation and determination

The company faces or anticipates the problems it may face. It starts with the investigation and analysis of the environment, and proposes multiple strategic ideas to solve problems or adapt to future environmental changes based on the company's capabilities and long-term goals. Finally, form and determine the development strategy of the enterprise. But the strategy at this time is still a general and directional basic framework. For example, the strategy of "developing overseas markets" is to realize the export of products, but how to export, which countries, what target markets, and the quantity and time of export should be based on the goals, objectives, and resources of the strategy. The quantity and capacity of the enterprise are planned, and the implementation plan is finally determined. That is, concrete development strategy.

The new business development plan of western enterprises is related to the survival and development of the enterprise, and it is a major subject that senior managers of the enterprise must study and make decisions. Therefore, enterprises generally have specialized functional agencies and candidates for this work. Whether the development strategy is correct or not depends on the evaluation of the proposed development strategy. The evaluation generally includes the following aspects:

(1) Necessity. To put forward a corporate development strategy, we must first answer why we should develop new businesses and what is the purpose? This must be analyzed and evaluated from the requirements of the socio-political and economic environment on the enterprise and the enterprise's own needs.

(2) Adaptability. Whether the proposed development strategy adapts to changes in the environment is the most important issue for the success of the strategy. Adaptive evaluation is based on the results of environmental analysis to evaluate whether the strategy can adapt to changes in the environment and the ability to withstand incidents after the implementation of the strategy.

(3) Profitability. The issue of income is one of the basic goals for the development of new businesses. The most commonly used indicator is the expected capital profit rate, which is to evaluate the profitability of a strategy by comparing the capital invested in the development strategy with the expected profit. The average capital profit rate is on average higher than the interest rate on capital loans. But for the development strategy, in the evaluation, we should not only pursue temporary profitability, but also long-term stable profitability.

(4) Risky. In general, the higher the profitability of a development strategy, the greater the risk. As far as the essence of strategic decision-making is concerned, risk exists objectively, and it is a challenge to risk. Therefore, the evaluation is usually to screen out the programs with the greatest or minimum risk. Risk evaluation is mainly to evaluate the degree of impact on business results after the failure of the strategy. However, how an enterprise treats the profitability and riskiness of its development strategy has a lot to do with the company's basic operating principles, business ideas, and the values of the company's managers.

(5) Possibility. Possibility is evaluated from the amount of resources necessary to implement the strategy and the capabilities of the company. A business strategy that exceeds the capabilities of an enterprise, even if it is highly profitable, will not be realized because of "more than enough heart". But the capabilities of enterprises are variable and can be expanded through hard work. Therefore, when evaluating, we should pay attention to the resource capabilities of the enterprise from a dynamic point of view.

(6) Timeliness. The environment of an enterprise is constantly changing. How to seize the opportunity to implement new business in a timely manner is a key to achieving business success. Timely evaluation should not only focus on determining the expected completion time of the strategic topic, but also pay attention to the expected completion time of the implementation phase. The delay of time will lead to the loss of timing. For example, Japanese manufacturers of audio equipment have developed new products that can replace the functions of ordinary magnetic tapes and compact discs. The target markets are the United States and the European Community. However, due to the insufficient estimation of the severity of foreign trade friction, the successfully developed new products could not be put into foreign markets as planned, and the time was lost.

Starting from the combination of products and markets, western companies have summarized the new business development strategies of many enterprises into the following basic types:

1. Market penetration strategy

Market penetration strategy refers to the strategy generated by existing products and existing market organizations. It is to change sales channels, increase product functions, reduce sales prices, increase advertising and promotion costs, and strive to expand market share and increase sales. Big sales corporate growth strategy. For example, the American Coca-Cola Company, which has penetrated into the market frontier for many years with a single product, has achieved great operating results.

2. Market development strategy

A market development strategy is a strategy that results from a combination of existing products and new markets. It is a business growth strategy that develops new customer tiers of existing products or new geographic markets to increase sales. Market development can be divided into regional development, domestic market development, and international market development. Japan's Matsushita Corporation has pushed domestic saturated black and white TVs and older models of color TVs to foreign markets and maintained its growth rate, which is an example of a market development strategy.

3 Product development strategy

Product development strategy is a strategy resulting from the development of a combination of new products and the company's existing market, that is, a company's growth strategy of placing new or improved products on the existing market in order to expand market share and increase sales. In a certain sense, this strategy is the core of the enterprise development strategy. Because for the enterprise, the market is an uncontrollable factor after all, and product development is a controllable factor that the company can strive to achieve. Japan's Toyota Motor Corporation continues to introduce new models and maintain its number one position in the domestic market is an example of a product development strategy.

4 Diversification Strategy

Diversification strategy refers to the product, market or service type of an enterprise, while maintaining the original business area, entering a new business area. A business strategy that enables an enterprise to simultaneously cover multiple business areas. It can also be said that the diversification strategy is a combination of new products and new markets to promote the diversified products and market strategies of enterprises. In order to achieve this strategic goal, it is necessary to take new technology development, new product research and development as the driving force, and accumulate sufficient operating resources in advance. Therefore, enterprises must fully analyze their own capabilities when implementing a diversified strategy. A correct diversification strategy can bring good prospects for enterprises. The miraculous development of Japan's post-war economy is aided by the diversification strategy is an important factor. However, the facts also show that improper or poor implementation of the diversification strategy will not only lead to the failure of new businesses, but also affect existing businesses and the future of the entire enterprise.

5. Reduction or withdrawal strategy

Retreat strategy refers to the strategy by which an enterprise retreats a product from its original market. It is a strategic transfer of the enterprise and a strategic action for the redistribution of enterprise resources. For example, the withdrawal of Teijin from the petroleum industry in the 1970s, and the concentration of manpower and funds on the pesticide and chemical fiber business is an example of a withdrawal strategy.

Regarding the types of enterprise development strategies, there are still many references abroad, such as intensive development strategies, integrated development strategies, and diversified development strategies.