The UEN (Strategic Business Unit)

What is the strategic business unit?

A strategic business unit or SBU can be defined as a group of products or services shared by certain customers in common despite not being exactly identical, either in the technology implemented for their manufacture or because they have the same approach.

They are a set of activities that are done by the company, and for these to be possible it is essential to create an action plan that can be shared for each of them, but at the same time is different from the rest of the company's tasks.

Another quite assertive concept about UEN is that it is about a method to organize efficiently the actions to be carried out by the companies, taking into account its global and corporate structure.

UEN It is an organizational resource that many companies have recently adapted and it is nothing more than small units that are independent from each other but belong to the same company. These

UEN They have different missions, visions, products, clients, etc. which makes them completely independent from each other. The purpose of forming business units is to separate the products of the different types of customers and not to let them get lost or the customer get confused.

A strategic business unit It is an organizational unit that, gathering most of the basic business functions (marketing, sales, production, etc.) competes in a specific segment. The strategic units form the homogeneous product / market set into which the activity of the company can be divided. An SBU has its own market segment, an identifiable group of customers and competitors, and its own income statement.

Within business planning and skills, the concept of a strategic business unit is of great importance, as it helps to develop strategies consistently and coordinated.

With the passage of time, companies become more complex, they no longer dedicate themselves to a single task in particular. Currently they cover as much as possible, becoming more than just a brand.

Despite always staying in the same field within the market, it is important to highlight how complicated it is to do this type of varied work without organization and advance planning, and that's when other important concepts emerge.

If you want to know what it is and what is the importance of the strategic business unit, keep reading this post.

Characteristics of the strategic business unit

This tool has several important features, which help differentiate it from other strategies and to easily recognize it in the company's action plan, such as these:

• At all times it has competence, it must be well identified.
• It is efficient in managing business functions within the company.
• The objective it pursues is diversified and different from the rest of the other units.
• The target market for this method must always be well identified.
• Within companies that have more than one business, or carry out varied activities, there should not be competition at a global level, on the contrary, the competitive attitude must be on the part of each of the activities.

Why is the strategic business unit useful?

One of the key factors for corporate strategies to be successful is that the company is diversified, which consists of a subdivision of said units belonging to the UEN. This helps companies have a more realistic view of their capabilities, in turn favoring decision-making.

The most notable advantage of this type of process is that allows to define appropriate strategies for the company in general and for each of the groups of employees within it, who are in charge of carrying out the tasks, from the most important to the smallest.

These particular and individual strategies carried out by the workers are adequately integrated into the general strategy of the company.

Dimensions to segment the strategic business unit

After several investigations it has been determined that to correctly identify a UEN there are 3 different dimensions that are functional:

1. Technology: This is the way in which the company ensures that it meets the needs of its customers, constantly manufacturing better products and services.
2. Clients Groups: the type of clientele that the company usually handles is important, in this way it is easier to determine the means to offer quality products and services.
3. Features: here it refers to the way in which basic needs are covered through products or services offered by the company.

From a point of view where companies are under pressure to constantly innovateNot only in the type of products and services offered but also in strategies and action plans, the creation of the UEN can result in the most efficient mechanism.

This allows and favors the strengthening of all the competitive capacities of the company. At the same time, have a new strategic business unit allows the business to grow constantly, implying that new objectives, projects and plans are created to achieve them.