Business Planning

Tendering, Contracting,Innovation in Business Planning

Explain the importance of successful tendering, contracting and innovation to business planning for an engineering organisation and and why they are essential to establish competitive advantage

In this article I will talk about why a successful tendering, contracting and innovation is a crucially important when planning and running an engineering business.
What is business planning? Business planning is like the foundation of the business, this contain information such as how will the business operate and what will the business do in future in order to be successful, the central process of this planning is called strategy where you seek ways to be better than your competitors.

Tendering

Firstly,Tendering is the procedure of making an bid, proposal or offer, or to express interest in request for tender, this is very important to business planning because tendering is the way to look for an offer that will give the engineering organisation their need e.g. supply of goods. The step choosing the right tender is by identifying the needs, this will be used as selection criteria where bidders will be shortlisted who meets the minimum criteria by using their info including their products and services they offer, experiences, qualification etc... This is done by contracting authority who will then invite the shortlisted bidder to tender and they will assess it to the award criteria.

A successful ideal tender consist the low cost, high quality and time; in other words can the bidder do the work efficiently with little cost and time at the same time producing a high quality product / service. It is important to check what the applicant or the bidder said in their documents as this is very important because they need to perform this e.g. product and services need to be made, cost, quotations, estimates etc... If ever a successful tender is chosen that meets all the required criteria of the business planning this will crucially help the business likely to be successful in the future because the having the cost is low, quick and the quality is high which will likely to result in more profits. This is essential to establish competitive advantage because you have a higher quality or range of products; having a high quality product will attract customers and stake holder which will result in financial growth because there will be more profits to be made.


On the other hand a unsuccessful tender will likely to fail the because if you have chosen the wrong contractor this will have a bad effect on the business because the products/ or services that need to be made are needing more time and financial to finish, this will cost time and more money which affects the business profits. This profits could have been used to develop some aspects of the products or services in the business; while your business is spending more time and money on one thing the other businesses might be moving on and doing other things that will lead to their competitive advantage such as developing or innovating product.

Contracting

Contract is legal agreement between two or more parties by which each party commit specific obligation or enjoys specific right, negotiated by virtue of that agreement. This is very important to business planning because this include what should be the other party need to commit to do and failure to do so can occur problems .

A successful contract between two parties will likely help the business this is because the two parties will need commit to their obligation and they will likely to try all their best to perform and complete their obligation making the parties to have more productivity. An advantage of more productivity will lead to more sales and profit which is essential to business success. The profits that have been made can be used for further development of the business such as innovating a new product.

Innovation

Innovation is a key part of engineering, organisation they invest a huge amount of money on innovation, research and development to gain competitive advantage to adapt the needs and expand business in the marketplace. This is very important to business because innovation will make the business to gain competitive advantage and adapt to the growing marketplace demands. This is done by product development where business research and try out new things such as using a new material on their product. This can lead to lower cost and more profits and can lead to a new discovery which again can lead to competitive advantage because they are the only one who have it, they can apply for a Designs and Patents Act 1988 to it therefore only them can use it or sell the rights so other business can use it which again lead to more profits because if they are the only one who have the item business can only buy from them.


If a business have more and better products/services to offer this will likely to meets the customer needs and expectations and attract customers or partners. This will lead to financial growth which is essential to business success more people will buy their products/services. To extent by adapting to the growing marketplace demands by innovating and introducing new products on the market the business will more likely to sell and attract potential customers because if they follow their customer needs like Apple who made their phone to have a bigger screen this will likely to build a relationship with the client and will make more sales in the future this will lead to more sales and profits which is essential to become a successful business.