STRATEGIC

BUSINESS
UNIT

INRODUCTION
A Strategic Business Unit (SBU) is an
autonomous division or organizational unit,
small enough to be flexible and large
enough to exercise control over most of
the factors affecting its long-term
performance.
Because strategic business units are more
agile and usually have independent
missions and objectives, they allow the
owning conglomerate to respond quickly to
changing economic or market situations .

Strategic
Management

The set of managerial decisions and actions that

determines the long-run performance of a
corporation.
It includes:
environmental scanning (internal & external)
strategy formulation
strategy implementation
evaluation and control
It focuses on integrating management,
marketing, finance/accounting,
production/operations, research and
development, and computer information systems
to achieve organizational success.

STRATEGIC MANAGEMENT
MODEL
Environmental
Scanning
External
Societal
Environment
General Forces
Task
Environment
Industry Analysis

Internal
Structure
Chain of Command
Culture
Beliefs, Expectations,
Values
Resources
Assets, Skills
Competencies,
Knowledge

Strategy
Formulation

Strategy
Implementation

Evaluation
and Control

Mission
Reason for
existence

Objectives
What results
to
accomplish
by when

Strategies
Plan to
achieve the
mission &
objectives

Policies
Broad
guidelines for

Programs

Process

decision
making

to monitor

Activities
needed to
accomplish
a plan

performance

Budgets

and take
corrective

Cost of the
programs

action

Procedures
Sequence
of steps
needed to
do the job

Performance

IMPORTANCE OF STRATEGIC
MANAGEMENT
A number of reasons are given, as why organizations should
engage in strategic management. Many research studies show that
a strategic-management approach to decision making can be
derived form

Financial Benefits
The formalized strategic management process does make a
difference in the recorded measurements of profits, sales, and
return on assets. Organizations that adopt a strategic
management approach can expect that the news system will lead
to improved financial performance.

Non-Financial Benefits
It provides a way to anticipate future problems and opportunities.
It provides employees with clear objectives and directions for the
future of the organization.
It results in more effective and better performance compared to
non- strategic management organizations.
It increases employee satisfaction and motivation.
It results in faster and better decision making and cost savings.

STRATEGIC PLANNING
Strategic planning is an organization's process of
defining its strategy, or direction, and making decisions
on allocating its resources to pursue this strategy.
A strategic plan should not be confused with a business
plan.
It is a document that summarizes, that why a business
exists, what it is trying to accomplish & how it will go
about doing so.
Strategic planning involves a sequence of activities, each
a vital element including:
1. Assessing the external environment
2. Evaluating internal capacity of the organization
3. Developing a vision and a mission for the future
4. Implementing the plan and,
5. Measuring the plan and altering the plan as needed.

STRATEGIC MANAGEMENT

PROCESS

A strategy is a comprehensive master plan stating HOW the

corporation will achieve its mission and objectives.
There are three types:
Corporate - a corporations overall direction and the
management of its businesses.
Business - emphasizes improving the competitive position
of a corporations products or services in a specific industry
or market segment.
Functional - concerned with developing a distinctive
competence to provide a company or business unit with a
competitive advantage.

STRATEGY
IMPLEMENTATION
The process of putting strategies and policies
into action through the development of:
Programs - statements of activities or steps
needed to accomplish a single-use plan.
Budgets - statements of a corporations
programs in dollar terms.
Procedures - systems of sequential steps or
techniques that describe in detail how to
perform particular tasks or jobs.

HIERARCHY OF
STRATEGY
Corporate
Headquarters

Strategic
Business
Unit

Manufacturing

Finance

Strategic
Business
Unit

Marketing

Corporate
Strategy

Business
(Division
Level)
Strategy

Strategic
Business
Unit

Research
and
Development

Human
Resources

Functional
Strategy

Strategy
Formulation

The process of developing long-range

plans to deal effectively with
environmental opportunities and
threats in light of corporate strengths
and weaknesses.
Composed of:
Mission

Objectives
Strategies
Policies

MISSION
Mission must be Feasible and Attainable. It should be
possible to achieve it.
Mission should be Clear enough so that any action can
be taken.
It should be Inspiring for the management, staff and
society at large.
It should be Precise enough, i.e., it should be neither
too broad nor too narrow.
It should be Unique and Distinctive to leave an impact
in everyones mind.
It should be Analytical, i.e., it should analyze the key
components of the strategy.
It should be Credible, i.e., all stakeholders should be
able to believe it.

They are defined as goals that organization wants to

achieve over a period of time. These are the foundation
of planning. Policies are developed in an organization so
as to achieve these objectives. Formulation of
objectives is the task of top level management.
Effective objectives have following features These are not single for an organization, but multiple.
Objectives should be both short-term as well as longterm.
Objectives must respond and react to changes in
environment, i.e., they must be flexible.
These must be feasible, realistic and operational.

OBJECTIV
ES

STRATEGIC
INTENT
Strategic intent helps management to
emphasize & concentrate on the priorities.
It is, influencing of an organizations resource
potential and core competencies to achieve what
at first may seem to be unachievable goals in the
competitive environment.
Strategic intent includes directing
organizations attention on the need of winning;
inspiring people by telling them that the targets
are valuable.
It encourages individual and team participation

CONCLUSION