Strategic Business Unit refers to a fully functional unit in a business with a personal vision and direction. Strategic Business Unit acts as an autonomous and independent division responsible for a specific activity or a product Characteristics of a Strategic Business Unit - Strategic Business Unit provides the business with an opportunity for separate planning. - They have their separate rival groups. - A Strategic Business Unit has a manager who is answerable for performance, planning and profitability. - SBU encourages similar units to work together. Strategic Business Unit Structure 1. Corporate Level 2. Business Level 3. Operational Level Includes operating units that act like individual businesses. Managers are allocated for strategizing and day-to-day operations. The corporate officer runs the SBU with strategic and financial controls. The senior executives' answers to the CEO SBU and Strategic Models 1. GE Nine Cell Matrix This matrix is used for business portfolio analysis in the strategic planning process. It explores the most attractive and profitable industry markets. 2. BCG Matrix In the BCG Matrix, the Strategic Business Unit has a separate objective and mission from the company. It helps to determine relative market share and compare it with the market growth rate. Why Have a Strategic Business Unit? 1. Helps a company to make a better future 2. Proves financially beneficial 3. Improves business longevity 4. Helps with strategic direction 5. Better decision-making 6. Develops useful strategic ideas and marketing strategies 7. Creates brand identity 8. Helps the parent company in avoiding competitive convergence 9. Has ample freedom to work independently. Example 1. Amazon 2. Tesla 3. Google 4. Apple This video is on Strategic Business Unit and it has the following sub-topics. Time Stamps 0:00 Introduction 00:21 Definition of SBU 00:46 What is an SBU? 01:33 Characteristics of a Strategic Business Unit 01:54 Strategic Business Unit Structure 02:25 SBU & Strategic Models 03:32 Why have a Strategic Business Unit? 04:03 Strategic Business Unit