strategic business unit

Examples of strategic business unit in the following topics:

• Strategic Business Units

  • A strategic business unit is a semi-autonomous corporate unit that focuses on a product offering and market segment.
  • Many companies feel that a functional organizational structure is not an efficient way to organize activities so they have re-engineered according to processes or strategic business units (SBUs).
  • An SBU may be a business unit within a larger corporation or it may be a business unto itself.
  • Managed as separate businesses, they are responsible to a parent corporation.
  • Diagram the role and functionality of a strategic business unit (SBU)

• GE Approach

  • The GE / McKinsey matrix is a model used to assess the strength of a strategic business unit (SBU) of a corporation.
  • The GE / McKinsey matrix is a model used to assess the strength of a strategic business unit (SBU) of a corporation.
  • The X-axis measures business unit strength on a high, medium, or low score.

• Modular Structure

  • In the modular structure, an organization focuses on developing specialized and relatively autonomous strategic business units.
  • The modular structure focuses on dividing the business into small, tightly knit strategic business units (SBUs), which focus on specific elements of the organizational process.
  • Interdependence among the units is limited because the focus of many SBUs is more inward than outward and because loyalty within SBUs tends to be very strong.
  • Modularization within organizations leads to the disaggregation of the traditional form of hierarchical governance into relatively small, autonomous organizational units (modules).
  • At GNU Health, for example, the surgery unit may interact with different departments at different times for different reasons.

• Overview of Inputs to Strategic Planning

  • Strategic plans can take the form of business or marketing plans, and consultants and industry experts are used in their development.
  • Strategic management is the highest of these levels in the sense that it is the broadest—it applies to all parts of the firm and incorporates the longest time horizon.
  • Under the broad corporate strategy are business-level competitive strategies and functional unit strategies.
  • Business strategy refers to the aggregated strategies of a single business firm or a strategic business unit (SBU) in a diversified corporation.
  • A strategic business unit is a semi-autonomous unit that is usually responsible for its own budgeting, new product decisions, hiring decisions, and price setting.

• Planning a Project

  • The stages of a project within the strategic-planning discipline provide a step-by-step approach to generating and implementing an effective strategy, for either a corporation or a strategic business unit (SBU).
  • Implementing a framework for generating a project-planning cycle, complete with strategic objectives, implementation methods, and assessment, is a primary responsibility of strategic managers.
  • This stage is the most strategic in nature, mapping out the business processes in sufficient detail to effectively accomplish the required objectives.
  • As shown in the figure, there are five basic strategic management steps in the planning cycle.
  • Outline the five basic stages in the planning cycle as derived within the field of strategic management

• Strategic, Tactical, and Operational Control

  • Strategic management provides overall direction to the enterprise.
  • This involves crafting vision statements (long-term projections for the future), mission statements (describing the organization's role in society), overall corporate objectives (both financial and strategic), strategic business unit objectives (both financial and strategic), and tactical objectives.
  • Strategy involves the future vision of the business; tactics involve the actual steps needed to achieve that vision.
  • For example, a marketing strategy for a motel might be to develop a business package targeting travel agents that includes an e-commerce solution.
  • The Government Business Reference Model shown here illustrates three levels of control: strategic (purpose), tactical (mechanisms), and operational (operations support).

• Competitive Advantage

  • Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry.
  • Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry.
  • Achieving competitive advantage strengthens and positions a business better within the business environment.
  • The opportunity cost of cloth production is defined as the amount of wine that must be given up in order to produce one more unit of cloth.
  • Thus, England would have the comparative advantage in cloth production relative to Portugal if it must give up less wine to produce another unit of cloth than the amount of wine that Portugal would have to give up to produce another unit of cloth.

• Managerial Accounting

  • Through integrating accounting knowledge with strategic decision-making, organizations can improve performance, refine strategy, and mitigate risk.
  • Managerial accounting creates additional documents used for internal, strategic decision-making.
  • Measuring the contribution per unit of constrained resource is called throughput accounting.
  • Some simpler examples of common managerial accounting tasks include developing business metrics, cost-benefit analyses, IT cost transparency, life cycle cost analysis, strategic management advice, sales forecasting, geographically segmented reporting, and rate and volume analysis.
  • Integrate a knowledge of accounting with its impact on strategic decision-making

• Influences on Business Buying

  • Firms respond to changes with aggressive promotional techniques such as advertising or price reductions to maintain market share and stabilize unit costs.
  • Firms can suffer from strategic inertia, or the automatic continuation of strategies unresponsive to changing market conditions.
  • Organizations that fall victim to strategic inertia believe that one way is the best way to satisfy their customers.
  • Such strategic inertia is dangerous since customer needs as well as competitive offerings eventually change over time.
  • Thus, in environments where such changes happen frequently, the strategic planning process needs to be ongoing and adaptive.

• Overview of Types of Strategic Plans

  • The broader overview of strategic plans, as well as the five subgroups within strategic planning, provide businesses with direction.
  • Strategic management is primarily concerned with the planning and execution processes that lead to the effective operations of a business.
  • Strategic management leverages strategic planning in order to design and execute a variety of plans specifically created to approach various facets of the business and competitive environment.
  • It is worth analyzing the broader overview of strategic plans, as well as the five subgroups within strategic planning that provide businesses with an outline of their strategic direction.
  • By combining all of these plans—often a few of each subgroup, depending on the scale and complexity of a business—a general strategic overview can be obtained.