Critical Appraisal of Business Planning Process Essay - 2

Critical Appraisal of Business Planning Process - Essay Example It is evidently clear from the discussion that external market conditions change rapidly in certain industries, thus driving a need for innovation in order to compete with other businesses operating in the same market environment. Products and services both from an entrepreneurial business and the competitive environment have a specific life cycle by which it generates profitability and consumer adoption patterns. A product or service will move from growth to maturity, a period where sales decline and thus new product development becomes a critical internal activity of the organization. This is why generating new ideas becomes a paramount objective in the planning process, usually requiring the input of executive leadership and managers to determine how best to introduce a new product whilst still recognizing costs. In generating new product ideas, the business leaders must determine whether compromises will be made, opportunity costs or trade-offs, in order to launch a new product o r service on the market. â€Å"Will conventional wisdom be defied, an understanding that teams, plans and reflects on learning lead to reduced cost, risk and speed to market†?. Recognising the financial impact of new product development and market launch urgency must be considered when generating new ideas. Innovations, however, are critical to maintaining a stable market position.Strategy formulation determines the objectives necessary to achieve a long-term market position. The strategy defines sustainability over the long-run or whether growth is an expectation related to revenue-building. An entrepreneurial dimension of strategy is persisting to find a better fit in the competitive market or developing a vision by which the organization founds its values and organizational structure against. Developing a long-term orientation is necessary for business planning as it determines the strategic direction the business intends to pursue and thus resources are allocated toward m eeting this purpose.