A strategic business unit (also known as SBU) is a business term used to present an independently managed entity or unit of a large company. Those strategic business units often have their own visions, missions, objectives, and course. A strategic business unit is a fully functional, independently operational setup of a particular business. These units are active and have their vision, growth, and direction. The main objective of such a unit is to maximize profits and mainly focus on offering a particular product targeting a market segment.
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5 Examples of a Strategic Business Unit John Spacey, updated on March 05, 2017 A strategic business unit is a division or team of a company that is responsible for its own strategy and bottom line. In some cases, they are run as a completely separate business. A Strategic Business Unit (SBU) is a fully independently operating entity or unit of a business with its own vision and course. Although it operates independently, it has to report directly to the organisation's head office about the status of their operations and performance. Strategic Business Units (SBU) are often aimed at a specific market. SBU in marketing establishes a clear vision, course and mission pertaining to a particular product. Examples of strategic business units show how these subunits function as specialized, independent structures and focus on a given objective. Objectives are not similar to that of the parent company. Here are some examples of strategic business units. 1. Products A separate unit can be brought out of a large company solely based on the product categories such a company provides. An example is a manufacturing company that sets up two product divisions named fashion and equipment with the same brand name and operational functions. 2. Services
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4 Characteristics of a Business Unit Business Unit vs. Subsidiary What Is a Business Unit? A business unit (also called a strategic business unit) is a subset of a larger company. An individual business unit may have its own strategic objectives, budget allocations, market research teams, product lines, and success metrics. Examples of strategic business units can be found in various industries, including: Automotive - Automakers such as General Motors and Ford have organized their operations into SBUs. Each SBU is responsible for a specific product line, such as trucks or SUVs, and has its own marketing, sales, and product development teams. An SBU may be a business unit within a larger corporation, or it may be a business into itself or a branch. Corporations may be composed of multiple SBUs, each of which is responsible for its own profitability. General Electric (GE) is an example of a company with this sort of business organization. Examples of Strategic Business Units Coca-Cola wanted to launch new products and tap into a new market. Since this was new territory, they created new strategic business units to launch Nestea and Fanta, and it was a success. These business units were independent and had an uninterrupted focus on these new products. Another example is LG.
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As the meaning of a strategic business unit suggests, it's a strategy to set up a separate unit of business or a group of businesses that are allowed to plan autonomously The strategy deals with a homogenous set of markets to minimize diversity. It allows a manager to formulate and implement internally consistent and coherent business strategies The purpose of a strategic business unit is to allow a part of a company to focus on a particular product or brand. Strategic business units are able to work independently to create.
Strategic business units can be defined according to the following: Product Large companies can be split into smaller divisions based on the product category. For example, an automobile manufacturer may split its product divisions into luxury sedans and off-road vehicles. Example of strategic business unit. One example of a company that uses strategic business units (SBUs) in its organizational structure is Procter & Gamble (P&G). P&G is a consumer goods company that produces a wide range of products, including personal care, household cleaning, and baby care products.
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A Strategic Business Unit (SBU) is a separate, specialized subsystem in a large organization that acts like an independent business. Management consultants developed the concept in the late 1970s as a means to focus on product strategy and strategic planning. A good example of a Strategic Business Unit Structure can be - A Multinational Conglomerate like Unilever. As a parent company, it has divided its operations into various SBUs, each focused on a particular line of products. One SBU might handle personal care products, another for foods and refreshments, and yet another for home care products.
