A strategic business unit is a division or team of a company that is responsible for its own strategy and bottom line. In some cases, they are run as a completely separate business. Alternatively, a strategic business unit may be primarily a marketing team that shares administrative and operational functions with the rest of an organization. The following are illustrative examples.
Customer SegmentA bank is structured with a separate division that services high net worth individuals.
ProductsA snowboard manufacturer is structured as two divisions: fashion and equipment. The divisions share a brand and administrative functions such as human resources and information systems.
ServicesA telecom company has a data center division that offers services such as colocation.
RegionsA European fashion brand operates its Japanese distribution and promotion capabilities as a separate unit.
InnovationA large information technology firm launches new innovative products as their own strategic business unit. The firm manages units as a growth investment with the expectation that they may not be profitable for several years after launch.
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