Sbu(strategic business unit) Definition An autonomous division or organizational unit, small enough to be flexible and large enough to exercise

control over most of the factors affecting its long-term performance. Because strategic business units are more agile (and usually have independent missions and objectives), they allow the owning conglomerate to respond quickly to changing economic or market situations. Meaning

An SBU is a relatively independent business with coherent set of products, objectives, strategies, and competitors. Several huge businesses consist of a number of SBUs. SBU is a set of product divisions that manufacture interrelated or alike products. Supports connected diversification for the reason that alike products that are assembled collectively share a universal underlying technology, resource, skill, or market.Companies have been utilizing a tool usually referred to as a strategic business unit (SBU). SBUs are separate little businesses systems as divisions in a bigger corporation to make sure that a certain product or product line spontaneous and handled as despite the fact that it was an autonomous business. To become an SBU, a business unit should meet particular criterias which include: Possess its own mission different from the mission of other SBUs, Set up its own integrated plans, reasonably separate from those of other SBUs, Have definable group of competitors, Administer its resources in key areas, and Have a proper size, neither too small nor too large. Concept of SBU A systematic technique of grouping the business of a multi-business company, which assists in strategic planning. An SBU is a grouping of linked businesses that can be taken for strategic planning separate from the rest of the businesses. Businesses/Products inside an SBU entertain similar strategic planning action and priorities. The job of segregating and analyzing the group of the business assortments, and then reorganizing them into separate independent entities. Products/business linked from the viewpoint of the function are assembled as a separate SBU. Distinct products and businesses are alienated. Grouping of the business on the SBU lines helps in strategic planning. In the basic factors like objectives, missions, etc, one SBU is distinct from the other. SBU will have its own distinct strategy and will possess its own set of competitors. Each SBU will have its own SBU. Advantages of SBUs Minimizes problems associated with sharing resources across functional areas, Quick response to environmental change, Increased focus on products and markets, Facilitates development if general managers, and Increases operational and strategic control, allowing corporate level executives to deal with strategic issues.

Disadvantages of SBUs Increased expenditure invited through doubling of operations, personnel, and investments, Difficulty in maintaining a uniform corporate image, Dysfunctional antagonism amongst divisions might detract from in general corporate performance, Over emphasis on short term performance, and Distortion of information.