STRATEGIC BUSINESS UNITS - February 20, 2010
A strategic business unit is a division or subsidiary of a large organization and it provides a distinct product or service and has its own mission and goals. A strategic business unit has a well defined set of customers or covers a specific geographic area. The top level managers of each SBU are responsible for formulating plans, objective and strategies for their units. These proposals are normally submitted to corporate headquarters for review. The SBUs manage its resources in key areas. All the SBUs are having proper size. They are neither too large nor too small. For each SBU a division executive is appointed and he is responsible for all the activities starting from product design to marketing and he is responsible for the profitability of his SBU.
A manager is appointed for each SBU with responsibility for guiding and promoting the product from research laboratory through product engineering, market research, production, package and marketing and bottom line responsibility for its profitability. Thus, on SBU has given its own mission and goals as well as managers who will develop and implement strategic and operating plans for the product.