...what is Strategic Business Unit? What are conditions required for creating an SBU? How is performance of SBU measured? What are the advantages and disadvantages of creating SBUs? Ans. Strategic business units are self-contained divisions formed within an organization for dealing with specific business concerns. These units pull together the diverse parts of the concerned organization while cutting across the geographical and diverse lines for serving a specific market in a more efficient manner. These strategic business units are also referred to as independent business units or strategic planning units. The main philosophical concept behind the formation of strategic business units is to serve a clear and defined market segment along with a clear and defined strategy. These business units have to contain all the needs and corporate capabilities of the respective organization. The entire portfolio of the concerned business has to be managed by allocation of managerial and capital resources for serving the overall interest of the entire organization. This helps in developing a balance in the earnings, sales and the assets at a level which is controlled and acceptable for taking the right amount of risks. The strategic business unit (SBU) is created with the application of set criteria which consist of the competitors, price models, customer groups and the overall experience of the company. It is also sometimes seen that a number of different verticals present in the same organization...
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...world. So far, it is the largest British retailer in term of sales and market share with, according to Thomson one banker, a total net income of £ 2,161.00 for the year 2009. It is also the third largest global retailer group in term of revenue after the American group Wal-Mart and the French group Carrefour. With a main activity of food global retailer, it has diversified his activity into clothing, home, financial services, car insurance, health, telecoms and internet services and software. However in this report we are focusing on its clothing unit which operates online. So to better know this Tesco clothes retailing, this report will bring an overview of the company and will analyse its current strategic position, the same as its fitness with the other business units. This report will also analyse the Tesco clothes retailing’s macro environment, the competitive environment, the strategic capability and also the future strategic options. Tesco clothes retailing’s brief overview: The Tesco clothes retailing company is among the biggest clothing retailer by volume in the United Kingdom as it was ranked at the third place in 2008 and had to juggle this place with Asda Direct online retailer behind Mark & Spencer and Primark (Hall, J.). Tesco clothes retailing is committed to bringing a wide range of clothes to men, women and kids. Its website has grown very fast and sales have risen by nearly 47% in 2009 compared to sales at the same period in 2008 and Asos.com retailer which...
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...Texas Instruments and Hawlett-Packard Strategic planning systems Texas Instruments is more diversified company, whereas, Hawlett – Packard single industry with related diversified firms. That is why we suggest TI to use vertical strategic planning system. Business units prepare strategic plans and submit them to senior management to review and approve. For related diversified and single industry firms, like HP, tend to use both vertical and horizontal. The horizontal dimension might be incorporated into the strategic planning process in a number of different ways. Moreover, tend to create new markets and exited as a cost- driven competitors entered and the market matured. In consequence, for HP importance of strategic planning is very high due to uncertainty of environment in a “build” strategy. However, Texas Instruments favored early entry, followed by expansion and consolidation of its position, resulting in dominant market share when the product matured. So, for TI importance of strategic planning is relatively low due to stable environment. Budgeting systems For Hawlett – Packard role of the budget is short-term planning tool, whereas, for Texas Instruments is control tool. HP is concentrated on more flexible production processes to meet the needs of its custom and low-volume markets, while TI concentrated on more capital-intensive and cost-effective production processes to supply its more standard, high-volume markets. For HP, this implies relatively high control...
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...while maintaining their vertical control from their headquarters in Calgary; by analysing Agrium’s history, corporate structure, and three key business units. At the end of this case study we hope other Canadian organizations will adopt the Agrium model when they consider expanding operations globally. Keywords: Agrium, Agro-food, , clusters, global, mining, and vertical integration Table of Contents Introduction.................................................................................................................................................. 1 History .......................................................................................................................................................... 1 Corporate Division ...................................................................................................................................... 2 Governance ............................................................................................................................................. 2 Board of Directors .................................................................................................................................. 3 Chief Executive Officer .......................................................................................................................... 3 Code of Business Conduct and Ethics................................................................................................ 4...
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...CHAPTER I INTRODUCTION 1. Background of Case Study Selection Differentiated strategy is the strategy pursued by the company to produce products that are different or unique compared to competitors' products. Researchers are interested in doing research on the company because researcher wanted to learn more about controls for differentiated strategies, both theoretical and practical. Minnesota Mining & Manufacturing Corporation (3M) is one of the companies that have successfully implemented differentiated product strategy that gives priority to innovation as a competitive advantage offered. This company believes that innovation to be the cornerstone of 3M’s future success. Current management has continued to embrace and expand these policies and philosophies. That is why researchers interested in evaluating policies and 3 M that philosophy is based on the innovation in the implementation of the strategy of differentiation 2. Motivation Motivation researchers conducted a study of control for differentiated strategies in Minnesota Mining & Manufacturing Corporation (3M) because the researchers wanted to know more about the factors that influenced the design of the system and also the policies and philosophy rooted in the innovations made by 3M Corporation. By studying and examining the existing policy and philosophy that is rooted in innovation from the company, researchers can get a clearer picture of how to do a proper evaluation and what steps...
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...Haier Case Study 1. Discuss the primary reasons why Haier moves from a single and dominant business strategy to a diversified strategy. The single and dominant business strategy, which denote relatively low levels of diversification, more fully diversified firms are classified into related and unrelated categories. A firm is related through its diversification when there are several links between its business units; for example, units may share products or services, technologies, or distribution channels. The more links among businesses, the more constrained is the relatedness of diversification. Unrelateness refers to the absence of direct links between businesses. 참고 : http://wenku.baidu.com/view/6a080e260722192e4536f624 2. A.Describe how Haier uses activity sharing and the transfer of core competencies to create value. (related diversification strategy) Haier uses both related and unrelated diversification strategies. Haier catapulted in the last two decades producing consumer products that are sold in similar fashion. They all shared distribution channels, outbound logistics, and sales forces. Haier was able to develop core competencies through effective activity sharing of primary activities resulting in a superb competitive advantage, ultimately creating value. CEO Zhang Ruimin realized that using both strategies’ can work in Haier’s favor with the ultimate goal of getting name recognition globally. His related diversification strategy used both operational...
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...Strategy 2 Organizational Structure 2 Strategic Business Unit/ Background 4 Mission & strategies of the Strategic Business Units 5 Actual Proposal 6 Proposed Portfolio Process 6 Proposed Selection Criteria 6 References 8 Company Raytheon is a major, US defense contractor specializing in defense, homeland security, and other governmental markets around the world. They hold the leading position in innovation of specialized defense technology. They provide state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing, effects, command, control, communications, and intelligence systems (C3I) as well as a wide range of mission support services. Raytheon serves both domestic and international customers. As a defense contractor in the defense industry, Raytheon depends on the US government for a substantial portion of its business which accounted for approximately 88% of net sales in 2009 and 2010. Vision and Strategy To be the most admired defense and aerospace systems company through our world class people and technology. Their four strategies are: * Focus on key strategic pursuits, technology, and mission assurance to sustain and grow our position in our four core defense markets: sensing, effects, C3I, and mission support. * Leverage our domain knowledge in all markets, including homeland security and cyber-security. * Expand international business by building on our relationships and deep...
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...1) What is the corporate rationale of the Virgin Group? Corporate rational is the way in which a corporate parent envisages the way that it can add value to its strategic business units. The Virgin Group sees itself as a restructurer; this means that it has low central costs due to relatively small corporate center, with fairly minimal involvement at business level. However they vary from the portfolio managers because they also set about trying to identify restructuring opportunities within their businesses and have the skills and expertise in order to intervene and introduce these changes where necessary. The Virgin Group have a huge range of about two hundred strategic business units ranging from airways to cola, and makeup to publishing. Part of Virgin's corporate rationale is that it tries to invade static' markets in which there are few competitors and where consumers don't get value for money because of this. The Virgin Group enters these markets to try and Is this Essay helpful? Join OPPapers to read more and access more than 350,000 just like it! get better grades shake them up, for example they did this with Virgin Airways and Virgin Cola. By doing this if they manage to produce the product or service for a slightly lower price than all other competitors within the market then they should, along with their strong Virgin brand name, gain a big market share fairly quickly because they have undercut everyone else. This is a good way in which to enter a market because...
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... www.hbr.org The Core Competence of the Corporation by C.K. Prahalad and Gary Hamel Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief—the core idea The Idea in Practice—putting the idea to work 2 The Core Competence of the Corporation 15 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications Product 6528 The Core Competence of the Corporation The Idea in Brief The Idea in Practice Diversified giant NEC competed in seemingly disparate businesses—semiconductors, telecommunications, computing, and consumer electronics—and dominated them all. CLARIFY CORE COMPETENCIES How? It considered itself not a collection of strategic business units, but a portfolio of core competencies—the company’s collective knowledge about how to coordinate diverse production skills and technologies. COPYRIGHT © 2003 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. NEC used its core competencies to achieve what most companies only attempt: Invent new markets, exploit emerging ones, delight customers with products they hadn’t even imagined—but definitely needed. Think of a diversified company as a tree: the trunk and major limbs as core products, smaller branches as business units, leaves and fruit as end products. Nourishing and stabilizing everything is the root system: core competencies. Focusing on core...
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...society, engendering an inclusive and sustainable development. Classification: Responsible Banking at Yes Bank is divided into 2 broad categories, 1. Responsible Banking – in thought 2. Responsible Banking – in action Responsible Banking – in thought: This is a strategic unit that undertakes sustainability research and development activities in order weave sustainability principles into the Bank’s long term business strategy and ensure triple bottom line accountability. Responsible Banking – in action: This division comprises strategic business units entrusted to address pertinent social and environmental development issues with financial solutions. These units include: 1. Microfinance Institutions Group 2. Inclusive & Social Banking 3. Agribusiness & Rural Banking 4. Sustainable Investment Banking Inclusive & Social Banking (ISB): Its objective is to reach out to the un-banked and under-banked population (in urban and rural areas) by leveraging on branch network, technology edge and relationship capital in the Public, Private and Social sectors. Working with the guiding principle of Frugal Innovations for Financial Inclusion, ISB is continuously developing innovative business models such as YES SAMPANN and forging partnerships for seamless implementation for the same. Agribusiness & Rural Banking: Its objective is to provide end-to-end financial solutions to stakeholders across the entire agricultural value chain, Yes Bank has domiciled...
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...Strategic Choice & Evaluation Paper STR/581 March 17, 2014 Victor Rayneri Executive Summary The University of New Mexico Medical Group, Inc. (UNMMG) was created in 2007 under the University Research Park and Economic Development Act in Albuquerque, New Mexico. UNMMG is classified as a not-for-profit corporation. UNMMG currently employs 900 clinical practitioners, represents 152 specialties who are exclusive caregivers to the state’s only academic medical center – University of New Mexico Hospital (UNMH) ("Review Of University Of New Mexico Medical Group, Inc. Operations", 2013). UNMMG is a multi-specialty group practice that operates 11 clinics in addition to attending at the 76 clinics at UNMH in Albuquerque area ("UNM Medical Group", 2014). UNMMG reports to the UNM Health Systems, which is comprised of the UNM School of Medicine, UNM Hospitals, UNM Sandoval Regional Medical Center, UNM Cancer Center, UNM College of Nursing and the UNM College of Pharmacy. Being the only academic medical center, UNMMG has to compete with other healthcare facilities in the area and in the state to provide high quality and innovation academic medicine. In order to realize growth for any organization, they need to evaluate alternatives such as strategies to maintain a competitive edge among its competitors. Strategies such as the best value discipline, generic strategy, and grand strategy should be identified for the organization. Strategy recommendations and recognitions...
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...the world have been shown to have two major characteristics which are strategic planning and core competence. A company’s strategy simply means its master plan for the future while its core competence is its strategic advantage. Most companies that have a strategic intent and a strategic architecture to develop those intent always end up being more dominant than companies that do not project towards the future. The managers of different strategic business units (SBU) in a company or organization must be aware of the common strategic intent being pursued, and collaborate towards it rather than compete against each other for short term benefits. This will enable competences to be easily identified and clarified. Access to diverse markets, distinct customer benefits and distinctiveness are the three major characteristics of a core competence. It is necessary to focus on the core competence in order to capture an emerging market. A core product developed from a core competence, derives an end product which can be sold to a customer at the consumer or manufacturing level. The core products are the components that add to the quality of the end products. Reflection To capture an emerging market, an industry must strive to forecast emerging customer needs. Both strategic intent and strategic architecture must be articulated by top management for SBU managers as a point of convergence. This will make each unit strive towards the common future goal while working on short term individual...
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...Case Study Analysis 8 Nestlé: Sustaining Growth in Mature Markets Strategic Management Instructor Dr. David J. Rambow Associate Professor of Management Summer Term 2011 Anchorage Campus Wayland Baptist University Nestlé: Sustaining Growth in Mature Markets Introduction Dated back to 1866, the Nestlé company had acquired profound knowledge of markets all over the world over the previous 130 years. Nestlé is the leading position in the global food industry with operated factories in 77 countries and sells its products on all six continents. Nestlé has a broadly diversified business portfolio and with leading global market shares in numerous product categories including coffee, mineral water, dairy products, nutrition and baby food, ice cream, confectionary, pet food, and chocolate. Nestlé is also committed to providing quality brands and products that are essential to good health. In doing so, Nestlé incorporated nutritional elements into vast array of product categories to promote food that are safe of high quality (Raisch & Ferlic, 2006). Peter Brabeck-Letmathe took the job as CEO of Nestlé in June 1997; he faced the challenge of having to improve the company’s profitability. In order to generate the financial means required to invest in growth initiatives, Brabeck launched a suite of process innovation initiative in an effort to maximizing existing assets, maximizing capacity utilization, and maximizing distribution logistics...
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...NORTH SOUTH UNIVERSITY BUS 489-Internship Submitted To: Adnan Habib (Intern Faculty) Lecturer School of Business North South University ACI Agribusiness Submitted By: Mushfiqur Rashid Chowdhury ID: 111 0195 030 North South University Date of Submission: 25th April, 2015 INTERNSHIP R E P O R T Table of Contents Contents | Page No. | Overview of the organization, department and people | 05 | Contribution to the organization | 06-07 | Lessons Learned | 08-09 | Interaction with supervisors | 09 | Dealt with difficulties encountered | 09-10 | Difference between expectation and experience | 10 | Influence in career plans | 10-11 | What would I do differently if I had to redo this internship | 11 | Appendix | 12-21 | Letter of Transmittal April 25, 2015 To Adnan Habib Lecturer North South University, Dhaka, Bangladesh. Subject: Submission of Internship Report Dear Sir, It is a great pleasure for me to have the opportunity to prepare my internship report which is prepared as a partial requirement of the Internship Course BUS 489 of BBA program under Department of Business Administration, North South University. In this internship report I have tried to come up with the experiences I have gathered from my three month stay in ACI Agribusiness under the Strategic & Planning department. I would like to thank you for giving me the opportunity to have the chance to prepare my internship report under you. ...
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...Lecture Week 7! Business Level Strategy! 2 ! 1 ! Learning Outcomes – Week 7! Be able to! • Identify Strategic Business units in Organisations! • Explain the different bases of achieving competitive advantage! • Explain the factors influencing the sustainability of competitive advantage! • Explain the relationship between competition and collaboration ! 3 ! Strategic Choices ! Exhibit III.1! 4 ! 2 ! Business Level Strategy - Outline! • Strategic business units! • Competitive advantage (strategy clock)! – Price-based! – Differentiation! – Hybrid and focus! • Sustainability of competitive advantage! • Co-operation and competition! • Game theory in competitive strategy! 5 ! Business Level Strategies! Exhibit 5.1! 6 ! 3 ! Strategic Business Units! A strategic business unit is a part of an organisation! for which there is a distinct external market for goods or services that is different from another SBU! • Opposing pitfalls in identifying SBUs! – Too many different products/markets means lack of focus! – Too few means not reflecting diversity of products/markets! 7 ! Criteria for Identifying SBUs! External! Same customer types! Same channels! Similar competitors! Internal! Similar products/ services! Similar technologies! Similar resources and competences! 8 ! 4 ! Bases of Competitive Advantage! • Competitive strategy! – The bases for achieving competitive advantage ! – The bases for providing best...
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