Introduction to Strategic Business Unit
SBU or Strategic Business Unit is an individual unit that operates on its own and has its own vision about the business strategies. It is a fully functional unit and operates separately in a company but it still is one of the most important units of the company.
The strategic business unit has its own direction in which it operates and the unit only reports to the headquarters of the company about how the operations are running.
What is the Strategic Business Unit and how does it function?
Strategic Business Unit or SBU is a unit that operates on its own and is big enough to have its own entities like HR, operational head, etc. it is an integral part of the company and even though its operations are independent of other departments of the company, it still has to report directly to the headquarters of the company.
Having a Strategic Business unit or SBU benefits the company in a lot of ways. The companies which have multiple product structures usually have a Strategic Business unit as all these products can be tracked separately and it helps to keep the overall operations of the company on track and keeps the company well organised.
SBU or a Strategic Business unit mostly targets a particular market segment and it provides expertise in product management and operations which help the parent company manage and track the different products that are produced in the company.
The strategic business unit has a specific structure where the top corporate officer assigns responsibility to the business managers for the operations that run in the business unit. There are different business divisions including the corporate managing, corporate production, corporate planning and corporate HR that form the structure of the strategic business unit.
The strategic business unit is formed with a combination of these divisions with the senior executive officer as the one in power who works under the supervision of the chief executive officer.
Characteristics of the Strategic Business Unit
Strategic business unit or SBU as a separate unit has its own separate characteristics, which are as follows:
It separates businesses or groups similar businesses for a more autonomous planning. It has a separate manager who is accountable for planning, profitability and performances. It is big enough to have its own divisions like HR, training department, etc.
So to conclude, the SBU focuses on the strategic planning of the company’s products and helps the company to manage the production and operations of products more efficiently, which helps to create a better business environment.
