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SBU

This document discusses strategic business units (SBUs). It provides several definitions of an SBU, including that an SBU is a distinct part of an organization that has its own external market, competitors, and executive group responsible for profitability. An SBU has three key characteristics: it can be planned separately, has its own set of competitors, and is managed by an executive responsible for strategy and profits. The document also discusses how identifying SBUs helps develop separate strategies and allocate appropriate funding for each unit. Finally, it mentions several criteria that can help identify SBUs, such as targeting similar customer types through similar channels facing similar competitors.

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Nisar Khan
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36 views2 pages

SBU

This document discusses strategic business units (SBUs). It provides several definitions of an SBU, including that an SBU is a distinct part of an organization that has its own external market, competitors, and executive group responsible for profitability. An SBU has three key characteristics: it can be planned separately, has its own set of competitors, and is managed by an executive responsible for strategy and profits. The document also discusses how identifying SBUs helps develop separate strategies and allocate appropriate funding for each unit. Finally, it mentions several criteria that can help identify SBUs, such as targeting similar customer types through similar channels facing similar competitors.

Uploaded by

Nisar Khan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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hLLp//wwwscrlbdcom/doc/39421348/SLraLeglc8uslnessunlL

8haraL peLroleum
A sLraLeglc buslness unlL (S8u) ls a parL an organlzaLlon for whlch Lhere ls a dlsLlncL exLernal markeL for
good or servlces LhaL ls dlfferenL from anoLher S8u

uLllnl1lCn
SLraLeglc8uslnessunlL or S8u ls undersLood as a buslnessunlL wlLhln Lhe overall corporaLe ldenLlLy whlch
ls dlsLlngulshable from oLher buslnessbecause lL serves a deflned exLernal markeL where managemenL
can conducL sLraLeglc plannlng ln relaLlon Lo producLs and markeLs1he unlque small buslness unlL
beneflLs LhaL a flrm aggresslvely promoLes ln a conslsLenL mannerWhen companles become really
largeLhey are besL LhoughL of as belng composed of a number of buslnesses (or S8us)
AfLer deflnlng mlsslona companyesLabllshes S8us whlch ls self conLalned dlvlslonproducL llne or
producL deparLmenL wlLhln an organlzaLlon
1o be ldenLlfled an S8u an enLlLy should Pave
a dlsLlncL mlsslon
CPave lLs own compeLlLors
CPave lLs own execuLlve group wlLh proflL responslblllLy
An S8u has Lhree characLerlsLlcs )
1 lL ls a slngle buslness or collecLlon of relaLed buslnesses LhaL can be planned separaLely from Lhe resL
of Lhe company )
2 lL has lLs own seL of compeLlLors )
3 lL has a manager who ls responslble for sLraLeglc plannlng and proflL performance and who conLrols
mosL of Lhe facLors affecLlng proflL

O 1he purpose of ldenLlfylng Lhe companys sLraLeglc buslness unlLs ls Lo develop separaLe sLraLeglc
and asslgn approprlaLe fundlng
O And helps Lhe developmenL of buslness level sLraLegles slnce Lhese may need Lo vary from one
S8u Lo anoLher
1he 8osLon consulLlng group maLrlx ldenLlfles four Lypes of S8us SLar Cash cow problem chlld
(quesLlon mark) and dog
A sLar ls a leadlng S8u (hlgh markeL share) ln an expandlng lndusLry (hlgh growLh)
A Cash cow ls a leadlng S8u (hlgh markeL share) ln a relaLlvely maLured or decllnlng lndusLry (low
growLh)
A problem chlld or quesLlon mark ls an S8u LhaL has made llLLle lmpacL ln Lhe markeL place(low markeL
share) ln an expandlng lndusLry (hlgh growLh)

Lxterna| and Interna| cr|ter|a that can he|p |n |dent|fy|ng appropr|ate S8Us
Market based cr|ter|a
ulfferenL parLs of an organlzaLlon mlghL be regarded as Lhe same S8u lf Lhey are LargeLlng Lhe same
cusLomer Lypes Lhrough Lhe same sorLs of channels and faclng slmllar compeLlLors
Capab|||t|es based cr|ter|a
arLs of an organlzaLlon should only be regarded as Lhe same S8u lf Lhey have slmllar sLraLeglc
capablllLle

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