Strategic business units (SBUs) are fully functional units within a business that develop their own strategic visions and report operational status to headquarters. SBUs operate as independent organizations with a specific focus on target markets and product offerings. They maintain internal divisions and have discrete marketing plans. The advantages of SBUs include allowing companies to focus on target audiences, differentiate products to meet customer needs, and gain competitive advantages through increased value.

1. Strategic Business Unit
SBU

2. • 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?

3. 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.

4. 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.

6. Appliances Aero space Electronics

7. AppliancesElectronics

9. SBU Model

10. Advantage of SBU
Focus
Allows for the organization to concentrate
on the target audience and provide cost
leadership to the company.

11. Advantage of SBU
Differentiation
Allows a company to meet the distinct
needs of the target audience by
supplying products and services that
are valued by those specific user.

12. Advantage of SBU
Competitive Advantages
Provided through the ability to offer more value
to your customers.

13. 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.

15. 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