unit 1 topic sbu

Strategic Business UnitSBU

• A fully functional and distinct unit of a business that develops its own strategic vision and direction.

• It is an important component of the company and must report back through headquarters about their operational status.

What is SBU?

Management of SBU

• Operate as an independent organization with a specific focus on target markets.

• Large enough to maintain internal divisions such as finance, HR and so forth.

Management of SBU

• A strategic business unit (SBU) is a profit centre which focuses on product offering and market segment.

• SBUs typically have a discrete marketing plan, analysis of competition, and marketing campaign, even though they may be part of a larger business entity.

Examples of SBUs

49 SBUs

Appliances Aero space Electronics

AppliancesElectronics

Formation of SBUs

SBU Model

Advantage of SBU

FocusAllows for the organization to concentrate on the target audience and provide cost leadership to the company.

Advantage of SBU

DifferentiationAllows a company to meet the distinct needs of the target audience by supplying products and services that are valued by those specific user.

Advantage of SBU

Competitive Advantages

Provided through the ability to offer more value to your customers.

Advantage of SBU

• Own separate ability to craft industry-specific strategy as it relates to their function.

• Helps to understand which business activities contribute the most value.

• Enable the ability to make decisions based on resources and efficiencies.

Success Determining Factors for SBU

1. The degree of autonomy given to each SBU manager.

2. The degree to which an SBU shares functional programs and facilities with other SBUs.

3. The manner in which the corporation is because of new changes in market.

Factors determining the success of SBU

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