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A strategic business unit (SBU) in business strategic management, is a profit center 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.
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. Companies today often use the word segmentation or division when referring to SBUs or an aggregation of SBUs that share such commonalities.
General Electric (GE) is an example of a company with this sort of business organization. SBUs are able to affect most factors which influence their performance. Managed as separate businesses, they are responsible to a parent corporation. GE has 49 SBUs.[1]
Business writer Michael Porter has developed a value chain model which focusses on the business unit, i.e. a firm's activities within a particular industry.[2]
- ^ Kotler, Keller, Philip, Kevin (2008). Marketing Management. Prentice Hall. p. 78. ISBN 978-0136009986.
{{cite book}}: CS1 maint: multiple names: authors list (link) - ^ Porter, M., The Value Chain and Competitive Advantage, in Barnes, D., ed (2001), Understanding Business: Processes, pg. 52, accessed 14 February 2024