Strategic Business Unit ( Sbu )

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Strategic business unit (SBU) Introduction: Strategic business unit (SBU) can be described as specialized subsystem within an organization working independently as a separate company. The concept of SBU was first put into practice by U.S. Company named General Electric. SBU are usually a completely independent small business entity having higher functional as well as decision autonomy. Depending on the level of autonomy SBUs may sometimes need to work closely with parent company. SBUs can use as a tool for diversification strategy by parent company. The main goal of this report is to provide an in-depth analysis about the products of PepsiCo. In addition, these will also analysis the marketing strategies used by the company Features: The…show more content…
Portfolio Planning Methods: When a firm has multiple strategic business units like PepsiCo does, it must decide what the objectives and strategies for each business are and how to allocate resources among them. A group of businesses can be considered a portfolio, just as a collection of artwork or investments compose a portfolio. In order to evaluate each business, companies sometimes utilize what’s called a portfolio planning approach. A portfolio planning approach involves analyzing a firm’s entire collection of businesses relative to one another. Two of the most widely used portfolio planning approaches include the Boston Consulting Group (BCG) matrix and the General Electric (GE) approach. BostonConsultation Group (BCG): The Boston Consulting Group (BCG) matrix helps companies evaluate each of its strategic business units based on two factors: (1) the SBU’s market growth rate (i.e., how fast the unit is growing compared to the industry in which it competes) and (2) the SBU’s relative market share (i.e., how the unit’s share of the market compares to the market share of its competitors). Because the BCG matrix assumes that profitability and market share are highly related, it is a useful approach for making business and investment decisions. However, the BCG matrix is subjective and managers should also use their

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