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

F

O

R

M

U

L

A

T

I

O

N

A

C

H

I

V

E

M

E

N

T

S

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.

zz

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)