Updated on July 13, 2024A strategic business unit (SBU) is a distinct organizational unit within a company that has its own specific market focus, product portfolio, and set of customers. SBUs are created to provide a strategic advantage by leveraging the company’s resources and capabilities to meet the unique needs of the target market.
USBUs are a key element of strategic business planning, enabling companies to focus on specific market segments and deliver tailored offerings to meet the unique needs of their customers. By leveraging their market expertise, customer focus, and operational autonomy, SBUs can drive growth and profitability.
What is an SBU (Strategic Business Unit)?
An SBU, or Strategic Business Unit, is a division or unit within a larger organization that operates as an independent entity with its own vision, mission, and objectives. It focuses on a specific market or product line and is responsible for its own profitability, strategic planning, and performance metrics. SBUs allow large organizations to operate efficiently by managing diverse businesses separately.
What is an example of an SBU?
A classic example of an SBU is Procter & Gamble (P&G), which has multiple SBUs, each focusing on different product lines like beauty care, health care, and household products. Each SBU operates independently, with its own management team, budget, and strategic goals.
Is Coca-Cola an SBU?
Coca-Cola, as a company, operates with multiple SBUs under its corporate umbrella. For example, its beverage products can be categorized into different SBUs based on regions or types of drinks (e.g., carbonated drinks, bottled water, sports drinks). Each of these SBUs may focus on different markets or customer segments and have distinct strategies.
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