A business concept is a concise idea that defines the foundation of a potential business. It comprises important information about the project and identifies the problems/gaps/opportunities, crafted solutions, products, market mix, value propositions, competitive advantages, target segment, target market, size of the target market, market share, market growth, associated business/market risks, and justifications for the project. A solid business concept provides the direction and structure necessary to turn an idea into a viable and profitable business venture.
Step-By-Step Process
- Obtain information from the market analysis, including the market size, customer segments, competition, market mix, trends, challenges and opportunities.
- Identify a need or opportunity in the market that your business can fill. This can be done by conducting market research, studying industry trends, and analysing the competition.
- Apply a design thinking approach to observe customers, understand their needs, challenges, and stories to use the particular product, craft a solution and prototype, and test the problem-solution fit in the market.
- Develop a unique value proposition for your business concept or products that sets it apart from the competition. A value proposition could be a product or service that is faster, cheaper, or more innovative than what is currently available.
- Do a product-market fit by describing and prototyping the product, showing its value propositions, estimating its cost of production, offering a market mix, and testing all these pieces of information in the market.Â
- Fine-tune the customer segment profile describing the demographic, geographic, psychographic, and behavioural of customers, along with their needs, desires, pains, and objectives to do the job.
- Describe the target market, its size, future growth rate, gaps, and trends.
- Define the market share target.
- Identify and analyse risks and strategies to mitigate them.
- List key justifications for this business concept.
- Prepare a document highlighting the above outcomes, and share it with your team and experts.
Example
A pharmaceutical manufacturing facility produces medicines like cancer treatment, immunology, neurology, digestive, infectious, respiratory, diabetic, musculoskeletal, and other well beings drugs. These medicines come in various dosage forms, such as a solid form (e.g., tablets and capsules), vials, UDV, injectables, nasal sprays, eye drops and gels, ear drops, and ampules.
The selling prices of the project products for the private markets are identified based on the proxy (70%) of the originator’s CIF prices in the Saudi market, including the insurance and transportation expenses (8%) of the factory ex-prices for the export markets. The project selling prices for the public tenders in the GCC markets are estimated at (30%) of the factory CIF prices in the private markets. Pharmaceutical distribution channels include manufacturers, distributors, wholesalers, and retailers.
In the pharmaceutical industry, promotion is a strong determinant in reaching target sales and usually comprises multi-promotional schemes, including free goods, price discounts, advertising, TV and radio commercials, digital promotion and more.
Pharmaceutical manufacturers typically target two types of customers, the first group is the end users or patients, and the second group is influencers and service providers, like technicians, hospitals, pharmacies, procurement administrators, and public tender authorities.
The total market size of the pharmaceutical industry of the GCC is estimated at ($18) billion in 2023, and the target market is ($2) billion in 2023. The project market share is (5%) of the target market.
In 2019, the pharma landscape of competition in the GCC involved about 52 local capacities and many distributors representing international pharmaceuticals like Pfizer, GSK, AstraZeneca, and Novartis.
Risk analysis for the pharma project identified risks like low sales, low quality of medicine, loss, and lack of liquidity and default, along with developing a strategy to mitigate risks.
Project justification may include a proven project feasibility, import substitution, showing compelling market needs, and government support for local production.
Useful Tips
- Identify a specific problem or need that needs quick fixing.
- Conduct market research to understand the market, customers, competition and trends.
- Innovate a solution and product that can produce unique value propositions wanted by customers.
- Concisely define the project concept after you test it in the market.
- Test the product-market fit in the market.
- Collect and validate information related to the project concept.
- Put the customer needs at the centre of the project concept.
- Analyse the competition and gather accurate and useful insights.
- Involve advisors and experts in crafting the business concept.
- Be open to feedback and adjust your business concept accordingly to meet the evolving needs of your target audience.
- Make your business concept unique, innovative, and desirable for customers.
Things To Avoid
- Avoid developing a business concept without conducting thorough market research.
- Avoid developing business concepts that are too complicated to understand.
- Avoid developing a business concept that is not unique or does not offer a clear value proposition compared to competitors.
- Inaccurate data and personal judgement.
- Approving a business concept without testing.
- Attached to the business idea regardless of its feasibility.
Final Note
This article is sourced from my new book- Your Guide For Preparing An Industrial Feasibility Study. For more information about the book:
Visit the book site: https://growenterprise.co.uk/book-your-guide-for-preparing-an-industrial-feasibility-study/
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Or email us at: maldawood@growenterprise.co.uk
The author: Munther Al Dawood- Industrial Enterprise Expert
Grow Enterprise 