SBU
1
Course: MBA-I
Subject: MARKETING MANAGEMENT - 1
Unit: II
SBU
2
Course: MBA-I
Subject: MARKETING MANAGEMENT - 1
Unit: II
WHAT IS STRATEGY ?
STRATEGY IS A SET OF KEY
DECISIONS MADE TO MEET
OBJECTIVES.
WHAT DOES STRATEGY INCLUDE ?
The Company objective
The strategy and tactics that will enable
the company to reach those objectives
The resources required, and how they are
going to obtained
Who is responsible for the choosing the goal?
What are the company’s business risks and
external factor?
ELEMENTS IN STRATEGY FORMULATION
MISSION
OBJECTIVE
GOALS
TARGETS
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ROLE OF STRATEGIST
Strategists are individuals or groups
who are primarily involved in the
formulation, implementation, and
evaluation of strategy.
A STRATEGIC BUSINESS UNIT IS….
A Unit comprising of one or more products
having a common market base whose
manager has complete responsibility for
integrating all functions into strategy against
an identifiable competitor.
In business, a strategic business unit (SBU) is a profit center which focuses
on product offering and market segment. SBUs typically have a discrete
marketing plan, analysis of competition, and marketing campaign, even
though they may be part of a larger business entity.
An SBU may be a business unit within a larger corporation, or it may be a
business unto itself or a branch. Corporations may be composed of multiple
SBUs, each of which is responsible for its own profitability.
CHARACTERISTIC OF SBU
It has its own set of competitors.
It has a manager responsible for strategic planning
and profit performance, who controls most of the
factors affecting profit.
It is a single business, or a collection of related
businesses, that can be planned separately from the rest
of the company.
ADVANTAGES OF SBUS
Intra Competition.
Corporate Image.
Better Management.
Higher Efficiency.
Better Customer Services.
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STRUCTURE OF SBU
CEO
SBU I SBU II SBU III
FINANCE MARKETING PRODUCTION
THE BCG GROWTH - SHARE
MATRIX
It is based on the combination of market growth and
market share relative to the next best competitor
It is based on the observation that a company’s business
unit can be classified into four categories:
Stars
Question marks
Cash cows
Dogs
The BCG matrix (aka B.C.G. analysis, BCG-matrix, Boston Box,Boston Matrix, Boston Consulting Group analysis, portfoliodiagram), a chart designed by Bruce Henderson for the BostonConsulting Group in 1968, may help corporations to analyze theirbusiness units or product lines. This helps the company allocateresources; brand marketing, product management, strategicmanagement, and portfolio analysis can use it as an analytical tool.
When using the Boston Consulting Group Matrix, SBUs can appearwithin any of the four quadrants (Star, Question Mark, Cash Cow,Dog) as a circle whose area represents their size. With differentcolors, competitors may also be shown. The precise location isdetermined by the two axes, market Growth as the Y axis, MarketShare as the X axis. Alternatively, changes over or two years can beshown by shading or other differences in design.xx.[1] Star productscurrently have high growth and high market-share. The QuestionMark identifies products with low share but high growth. A CashCow has high share but low growth. Finally, Dog labels productwhich has low growth and low share.
QUESTION MARKS (?)
Most businesses start of as question marks.
They will absorb great amounts of cash if the market share remains
unchanged, (low).
Investments should be high for question marks.
WHY QUESTION MARKS ?
Analysis with DABUR INDIA-
Dazzl
New-U
Chyawan Prakash
STARS
stars are leaders in Business.
High growth, High market share.
Effort should be made to hold the market share otherwise the star will become a CASH COW.
Analysis with DABUR INDIA-
DABUR GLUCOSE-32% (GROWTH RATE)
DABUR HONEY-26%(GROWTH RATE)
MESWAK-39%(GROWTH RATE)
CASH COWThey are foundation of the company and often the stars of yesterday.
They extract the profits by investing as little cash as possible.
They are located in an industry that is mature, not growing or declining.
Analysis With DABUR INDIA-
CHYAWAN PRASH
HAJMOLA
REAL
DOGS
Dogs are the cash traps.
Dogs do not have potential to bring in much
cash.
Number of dogs in the company should be
minimized.
Business is situated at a declining stage.
GROWTH STRATEGY
REFERENCES
en.wikipedia.org/wiki/Strategic_business_unit
www.ohio.edu/people/gupta/MKT202Kotler/Chapter
%2002.ppt
PHILIP KOTLER (BOOK- MARKETING
MANAGEMENT – CHAPTER-2)