STRATEGIC BUSINESS UNITS & CORPORATE PLANNING PROCESS

Presented to:Mr.R.R.Srivastava

Presented by:Vishnu Nair r

STRATEGIC BUSINESS UNITS

Strategic business units are absolutely essential for multi product organizations. These business units are basically known as profit centers. They are focused towards a set of products and are responsible for each and every decision / strategy to be taken for that particular set of products. An SBU may be a business unit within a larger corporation, or it may be a business unto itself. Corporations may be composed of multiple SBUs, each of which is responsible for its own profitability.

The best example of strategic business unit would be to take organizations like HUL, P&G or LG , General electric {49 SBUs}.
These organizations are characterized by multiple categories and multiple product lines. For example, HUL may have a line of products in the shampoo category, Similarly LG might have a line of products in the television category. Thus to track the investments against return, they may classify the category as a different SBU itself.

ADVANTAGES OF SBU

SBU supports cooperation between the departments of the company which has a similar range of activities. Tightness the strategic management and control of large diverse business organizations. Improvement of accounting operations.

Easier planning of activities.

DISADVANTAGES OF SBU

Places another layer of management between divisions and the corporate. May cause unhealthy competition to get corporate resources. May be the cause of the unclear situation with regard to the management activities.

CORPORATE PLANNING

Corporate planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.
Corporate planning is a systematic approach to strategic decision making. Corporate planning can either be short term or long term.

CORPORATE PLANNING PROCESS

Analyze the external environment. Analyze the internal environment. Define the business mission and vision. Set corporate objectives. Formulate strategies. Make tactical plans. Build in procedures for monitoring and controlling.