Concept Test-2

Strategic Business Units (SBU): A strategic business unit, also known as SBU, is a business
term used to present an independently managed entity or branch of a large company. Those
strategic business units usually have their own visions, missions, objectives, and course.
Moreover, their planning is done separately from other businesses, and their goals are different
from the parent enterprise and elemental to the long-term performance of the business. An SBU
may be a business unit within a larger corporation or a business into itself or a branch. An SBU
has three components:

1. It is a single business or a collection of related businesses that can be planned separately from
the rest of the company.

Example: United Group. United projects are United Hospital Limited, United International
University, UNITED POWER GENERATION & DISTRIBUTION COMPANY LTD, and
United Shipping & Logistics Services Ltd. Those branches could be classified by SBU1, SBU2
and SBU3 & SBU4

2. It has its own set of competitors.

Example: United Hospital Limited has its own competitors like Labaid hospital, Square hospital,
Evercare hospital. United International University's competitors are Daffodil International
University, East-west University, Brac University, North South University etc. Thus every
branch has its own competitors.

3. It has a manager responsible for strategic planning and profit performance, who controls most
of the factors affecting profit.

Example: SBU's businesses are separate from each other; its controller will also be separated
from each other. Every business sector needs an individual manager responsible for all things.
United Hospital Limited controller is The Chief Executive Officer (CEO), United International
University's controller is the vice-chancellor (VC). Thus every branch has its own controller &
manager.