What is strategic business unit and businesses unit strategy planning process

Marketing management

1. Subject; Marketing management Submitted By: Kavya Hs 1st Mcom MIT First Grade College Submitted To: Arun Kumar sir

2. Topic; What is Strategic Business Unit and businesses unit strategy planning process

3. What is strategic business unit A strategic business unit, popularly known as SBU, is a fully-functional unit of a business that has its own vision and direction. Typically, a strategic business unit operates as a separate unit, but it is also an important part of the company. It reports to the headquarters about its operational status.

4. The best example of SBU are companies like Proctor and Gamble, LG etc. These companies have different product categories under one roof. For example, LG as a company makes consumer durables. It makes refrigerators, washing machines, air-conditioners as well as televisions.

5. Strategic Business Unit Planning Process

6. What is SWOT analysis SWOT analysis is a framework for identifying and analyzing an organization's strengths, weaknesses, opportunities and threats. These words make up the SWOT acronym. The primary goal of SWOT analysis is to increase awareness of the factors that go into making a business decision or establishing a business strategy.

7. THE BUSINESS MISSION Each business unit needs to define its specific mission within the broader company mission. Thus, a television- studio-lighting-equipment company might define its mission as “To target major television studios and become their vendor of choice for lighting technologies that represent the most advanced and reliable studio lighting arrangements.” Notice this mission does not mention winning business from smaller television studios, offering the lowest price, or venturing into non-lighting products.

8. 1 2 3 4 Market Opportunity Matrix: Success probability High Low High Attractiveness Low

9. 1 2 3 4 -EXTERNAL ENVIRONMENT ANALYSIS ( Opportunity and Threats) Threat: a challenge posed by an unfavorable trend or development that would lead, in the absence of defensive marketing action, to deterioration in sales or profit. Probability of occurence High Low 1 2 3 4 High Seriousness Low

10. Internal Environment Analysis (Strengths/Weaknesses Analysis) Each business needs to evaluate its internal strengths and weaknesses. The business does not have to correct all its weakness, nor should it gloat about all its strengths. The big question is whether the business should limit it self to those opportunities where it possesses the required strengths or whether it should consider better opportunities where it might have to acquire or develop certain strengths. Some times, business does poorly not because its departments lack the required strengths, but because they do not work together as a team. It is therefore critical to assess interdepartmental working relationships as part of the internal environmental audit.

11. Goal formulation Goal formulation : the formulation of the specific goals for the planning period. Managers use the goals to describe objectives that are specific with respect to magnitude and time. The objective including: Profitability Sales growth Market share improvement Risk containment Innovation reputation

12. Goals criteria: Hierarchically, from the most to the least important Quantitatively Realistic consistent

13. Strategic Formulation Goals indicate what business wants to achieve Strategy indicate a game plan for getting the goals. Business strategy consists of marketing strategy, technology strategy, and sourcing strategy.

14. Porter’s Generic Strategies: Overall cost leadership; lowest production and distribution cost in order to get lower price than its competitor and winning the market. Differentiation; concentrates on achieving superior performance in an important customer benefit area. Example, the firm seeking quality leadership. Focus; business focuses on one or more narrow market segments.

15. Program formulation and Implementation A great marketing strategy can be sabotaged by poor implementation. According to Mc kinsey and Company, strategy is only one of seven elements In successful business practice. The frame work of the elements is called Mc Kinsey’s 7-s framework for business success. The elements are: Hard ware elements: strategy, structure and systems Soft ware elements: Style, skills, staff, shared values According to this framework, when these elements are present, companies are usually more successful at strategy implementation.

16. Feedback and Control As it implements its strategy, the firm needs to track the results and monitor new developments on the marketing environment. If the environments change, the company can count it, so the company need to review and revise its implementation, programs, strategies, or even objective. The key to organizational health is willingness to examine the changing environment and to adopt new goals and behaviors. High performance organizations continously monitor the environment and use flexible strategic planning to maintain a fit with the evolution of the environment.