Strategic Business Unit - Revision history

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	== See Also ==		== See Also ==
		+	A Strategic Business Unit (SBU) is a semi-autonomous unit within an organization that focuses on a specific product line, market segment, or geographic region, operating with its own mission, objectives, resources, and strategies. SBUs are created to ensure that the unit's specific market focus receives the attention and resources necessary to achieve its strategic goals, often with their own profit and loss responsibility. Understanding SBUs involves exploring their formation, management, and strategic importance within larger corporations. To gain a comprehensive understanding of Strategic Business Units and their role in organizational strategy and structure, consider exploring the following related topics:
		+
		+	*[[Corporate Strategy]] is the overall scope and direction of a corporation and the way in which its various business operations work together to achieve particular goals. Understanding how SBUs fit into the broader corporate strategy is crucial.
		+	*[[Business Strategy\|Business-Level Strategy]]: Focuses on how to compete in a given business to obtain a competitive advantage. This is directly relevant to the operation of SBUs, as each unit must develop its own competitive strategies within the overarching corporate framework.
		+	*[[Organizational Structure]]: The system that outlines how certain activities are directed to achieve the organizational goals. SBUs often lead to a more decentralized organizational structure, allowing for quicker decision-making and adaptation to local market conditions.
		+	*[[Market Segmentation]]: The process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers based on some type of shared characteristics. This underpins the rationale for creating SBUs to address specific segments effectively.
		+	*Product Line Management: The administration of a particular line of products considered a single business unit within a larger corporate context. SBUs often align with specific product lines, requiring specialized management practices.
		+	*[[Performance Measurement]] and Evaluation: Involves the selection and use of quantitative and qualitative metrics to assess the effectiveness of an SBU in achieving its objectives. This includes financial metrics like ROI (Return on Investment), as well as non-financial metrics.
		+	*[[Resource Allocation]] is the process of distributing an organization's resources across various operations; in this context, it refers to how resources are allocated to different SBUs to optimize corporate performance.
		+	*[[Strategic Planning]] Process: The steps a company takes to develop strategies and allocate resources to achieve its goals. Understanding how strategic planning is conducted within SBUs is key to their success.
		+	*[[Competitive Analysis]]: Analyzing the market and competitive environment to inform the strategic positioning and actions of the SBU.
		+	*[[Innovation]] and Product Development: How SBUs approach the development of new products or improvements to meet market demands and stay competitive.
		+	*Global Strategy and International Markets: For multinational corporations, the strategic considerations for SBUs operating in different geographic markets, including localization strategies and global integration.
		+	*[[Change Management]]: The methods and practices involved in guiding an organization through growth, market changes, or internal restructuring. SBUs often necessitate organizational change to remain aligned with corporate strategy.
		+
		+	Exploring these topics provides a broad perspective on Strategic Business Units, highlighting their strategic significance in allowing companies to efficiently manage diverse product lines or market segments and respond agilely to competitive challenges and market opportunities.
		+
		+
		+

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 *Hiring: Building a new business is different than operating an existing business. People who excel at operating existing businesses may struggle at starting a new business, and vice verse. In “Building Human Machines is Product Management,” Tommi Forsström, VP of Product at Shutterstock, shared his approach to hiring, and how hiring helps him instill strong culture. During job interviews, Tommi asks questions that help him understand a candidate’s long-term goals, and works to help the candidates he hires to achieve those goals. This has been a helpful strategy for Tommi to keep his team motivated. Hire people who want to build a business from the ground up and work effectively in an environment of uncertainty and experimentation.
 *Culture: If you walk into a startup’s office, you’re likely to find a ping pong table and a keg of beer. While it’s easy to understand why employees would appreciate such perks, Lina Stern, Head of [[Employee]] Experience and [[Organization Design|Organizational Design]] at LearnVest, said that in order to truly create a culture that keeps employees motivated to innovate, you need to do more. “People want to feel valued for the contributions they make to the organization,” she said. Lina recommends personalizing your approach to employee experience according to the values of the company and what will help each individual employee work most effectively. So, if your developers do their best work at night, Lina believes it’s ok for them to stroll into the office at 11 am. These practices, along with encouraging employees to test ideas and learn from them, help create the right environment for new product development.
-*[[Incentives]]: The reward for starting a successful company as an [[entrepreneur]] is obvious: wealth and fame. Unfortunately, large corporations can’t always offer [[stock]] or other significant financial incentives. Fortunately, they don’t need to. According to Bob Dorf, Author of The Startup Owner’s Manual, employees are often motivated by career upside. They want to be recognized for their work and grow within the company. Both Bob and Aaron Eden, a former [[innovation]] leader at Intuit, recommended giving the team exposure to senior [[leadership]] to keep them motivated. Give your business unit opportunity to present progress to senior leadership at the parent company, and invite [[Chief Information Officer (CIO)|senior leadership]] to join [[Brainstorming|brainstorming]] sessions.
+*Incentives: The reward for starting a successful company as an [[entrepreneur]] is obvious: wealth and fame. Unfortunately, large corporations can’t always offer [[stock]] or other significant financial incentives. Fortunately, they don’t need to. According to Bob Dorf, Author of The Startup Owner’s Manual, employees are often motivated by career upside. They want to be recognized for their work and grow within the company. Both Bob and Aaron Eden, a former [[innovation]] leader at Intuit, recommended giving the team exposure to senior [[leadership]] to keep them motivated. Give your business unit opportunity to present progress to senior leadership at the parent company, and invite [[Chief Information Officer (CIO)|senior leadership]] to join [[Brainstorming|brainstorming]] sessions.

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 [[Business Strategy]]<br />
 [[Business Capability]]
 == References ==

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 [[Organizational Structure]]<br />
 [[BCG Matrix]]<br />
-[[GE/McKinsey Matrix]]
+[[GE/McKinsey Matrix]]<br />
 [[Business Strategy]]<br />
 [[Business Capability]]
 == References ==

← Older revision		Revision as of 17:26, 25 February 2019
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−	'''~~Content Coming Soon~~'''	+	A '''strategic business unit''' is a separate, specialised subsystem in the company which acts as an independent company. Having SBU assists organisations to plan their strategies and make manufacturing decisions. A Strategic Business Unit (SBU) is a basic organisational unit for which it is meaningful to formulate a separate competitive strategy (Grant, 2002). Typically the SBU is a business providing a single product or a number of closely related products that serve a well-defined product-market combination and compete with a well-defined set of competitors. "SBUs operate as autonomous units, and have the primary responsibility and authority for managing their basic functions (Johnson et al., 2008)."<ref>Defining Strategic Business Unit [https://www.kbmanage.com/concept/strategic-business-units KB Manage]</ref>
		+
		+
		+	== Creating A Strategic Business Unit ==
		+
		+	'''How to Create a Strategic Business Unit'''<ref>How to Create a Strategic Business Unit [https://www.thisisproductmanagement.com/blog/strategic-business-unit/ This is Product Management]</ref><br />
		+	Creating a strategic business unit enables companies to pursue new businesses, products, markets, and technologies, without the constraints of working within a large organization. The business unit has a dedicated management team, a unique [[Brand\|brand]], different goals than the [[Parent Company\|parent organization]], and often a different physical space. It benefits from the advantages of a startup, such as an autonomous team, but isn’t strapped for resources like most [[Start-Up\|startups]] are. And it benefits from the advantages of a large company, such as an established brand and customer base, but can sidestep the challenges faced by large companies, such as excessive bureaucracy.
		+
		+	In order to, create a business unit that builds successful products, you need to get a few things right: the organizational structure, hiring, culture, and compensation.
		+	*Organizational structure: “Move fast and break things” has long been the mantra of Silicon Valley startups. These startups are always testing new ideas and iterating quickly based on customer feedback. “Breaking things” is an inevitable part of this process. In other words, many of your ideas are likely to fail. In “Incubation is Product Management,” Jeremiah Zinn, Chief Product Officer at Bark & Co., said that his team doesn’t ultimately pursue about 80% of their ideas. Separating the business unit from the rest of the organization gives the team room to experiment – and break things – without being stifled by process and brand concerns.
		+	*Hiring: Building a new business is different than operating an existing business. People who excel at operating existing businesses may struggle at starting a new business, and vice verse. In “Building Human Machines is Product Management,” Tommi Forsström, VP of Product at Shutterstock, shared his approach to hiring, and how hiring helps him instill strong culture. During job interviews, Tommi asks questions that help him understand a candidate’s long-term goals, and works to help the candidates he hires to achieve those goals. This has been a helpful strategy for Tommi to keep his team motivated. Hire people who want to build a business from the ground up and work effectively in an environment of uncertainty and experimentation.
		+	*Culture: If you walk into a startup’s office, you’re likely to find a ping pong table and a keg of beer. While it’s easy to understand why employees would appreciate such perks, Lina Stern, Head of Employee Experience and [[Organization Design\|Organizational Design]] at LearnVest, said that in order to truly create a culture that keeps employees motivated to innovate, you need to do more. “People want to feel valued for the contributions they make to the organization,” she said. Lina recommends personalizing your approach to employee experience according to the values of the company and what will help each individual employee work most effectively. So, if your developers do their best work at night, Lina believes it’s ok for them to stroll into the office at 11 am. These practices, along with encouraging employees to test ideas and learn from them, help create the right environment for new product development.
		+	*Incentives: The reward for starting a successful company as an entrepreneur is obvious: wealth and fame. Unfortunately, large corporations can’t always offer stock or other significant financial incentives. Fortunately, they don’t need to. According to Bob Dorf, Author of The Startup Owner’s Manual, employees are often motivated by career upside. They want to be recognized for their work and grow within the company. Both Bob and Aaron Eden, a former innovation leader at Intuit, recommended giving the team exposure to senior leadership to keep them motivated. Give your business unit opportunity to present progress to senior leadership at the parent company, and invite [[Chief Information Officer (CIO)\|senior leadership]] to join [[Brainstorming\|brainstorming]] sessions.