15 Questions
What is a strategic business unit (SBU) defined by?
Having similar customers or competitors
How are SBUs evaluated?
On the sales and profits they generate
What kind of decisions can SBUs make?
Decisions about which strategy to use in their markets
What are the two types of strategies that SBUs pursue?
Generic and interactive
What is an example of an SBU?
The medical division of a large corporation serving hospitals
What defines a strategic business unit (SBU)?
Similar customers, competitors, or strategic capabilities
How are SBUs evaluated?
Based on the sales and profits they generate
What do SBUs make decisions about?
Product portfolios and the markets they serve
What are the two types of strategies pursued by SBUs?
Generic and interactive
What are SBUs responsible for?
The results of their business
SBUs make decisions on product portfolios and on the markets they serve. They can make decisions about which strategy to use in their markets in order to meet corporate goals. They are the experts in their markets and know their customers. SBUs are evaluated on the sales and profits they generate and are responsible for the results of their business. The strategies that the SBUs pursue are either generic (i.e., strategies regularly employed by organizations) or interactive (i.e., the organization’s direct response to
market conditions
A strategic business unit is a unit that provides specific products or services in a specific business or market. Small companies often consist of one strategic business unit, whereas larger corporations have many SBUs. Strategic business units are defined by having similar customers or competitors or by having similar strategic capabilities. An example of a SBU is the medical division of a large corporation which serves
hospitals
What Strategic Options Does the SBU
have
SBUs are evaluated on the sales and profits they generate and are responsible for the results of their
business
An example of a SBU is the medical division of a large corporation which serves
hospitals
Study Notes
Strategic Business Unit (SBU)
- A strategic business unit (SBU) is a unit that provides specific products or services in a specific business or market.
- SBUs are defined by having similar customers, competitors, or strategic capabilities.
- Small companies often consist of one SBU, while larger corporations have multiple SBUs.
Evaluation of SBUs
- SBUs are evaluated on the sales and profits they generate.
- They are responsible for the results of their business.
Decision-Making Authority of SBUs
- SBUs make decisions on product portfolios and the markets they serve.
- They can make decisions about which strategy to use in their markets to meet corporate goals.
- They are the experts in their markets and know their customers.
Strategies Pursued by SBUs
- SBUs pursue either generic (i.e., strategies regularly employed by organizations) or interactive (i.e., the organization's direct response to) strategies.
Example of an SBU
- The medical division of a large corporation that serves a specific market is an example of an SBU.
Test your knowledge of strategic options available to Strategic Business Units (SBUs) with this quiz. Explore the different strategies that SBUs can employ to thrive in their specific markets, from product differentiation to cost leadership and more. Gain insights into the strategic decisions that can drive success for SBUs within various industries.
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