Strategic business units (SBUs) are individual units within the firm that operate like separate businesses, with each having its own mission, business objectives, marketing plans, resources, managers, and competitors.
In other words, an SBU can be a division, a product line, or a profit center within the parent company. Even though an SBU is part of the parent company, they can be considered a separate business who may compete with other SBU’s for corporate resources.
Example of a strategic business unit (SBU)
For example Pepsico has several strategic business units:
- Taco Bell
- Pizza Hut
- Mountain Dew
- Lipton Tea Brands
- Frito Lay
GE or General Electric has several SBU’s that include:
- GE Capital
- GE Energy Management
- GE Oil & Gas
- GE Home & Business Solutions
A final example for strategic business units is Kraft Foods. Their SBU’s would include the following subgroups that fall under the main corporation:
- Breakfast foods
- Pet foods
Note: each SBU would have its own mission, business objectives and marketing plans.
« Back to Glossary Index