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SBU and BCG Matrix

SBU and BCG Matrix. Lecture Slide 4-B. STRATEGIC BUSINESS UNIT (SBU) 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 .

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SBU and BCG Matrix

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  1. SBU and BCG Matrix Lecture Slide 4-B

  2. STRATEGIC BUSINESS UNIT (SBU) • An autonomous division or organizational unit, small enough to be flexible and large enough to exercisecontrol over most of the factors affecting its long-termperformance. • Because strategic business units are more agile (and usually have independentmissions and objectives), they allow the owningconglomerate to respond quickly to changing economic or market situations.

  3. BCG Matrix (Boston Consulting Group)

  4. 1.Build Share 2.Hold 3.Harvest 4.Divest

  5. Build Share Here the company can invest to increase market share e.g, turning a question mark into a star • Hold Here the company invests just enough to keep the SBU in its present position.

  6. Harvest Here the company reduces amount of investment in order to maximise the short-term cash flows and profits from the SBU in its present position. • Divest the company can divest the SBU by phasing it out or selling it – in order to use the resources elsewhere e.g investing in the more promising ‘question mark’.

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