Analyzing the Current Business Portfolio
The major activity in strategic planning is business portfolio analysis, whereby management evaluates the products and businesses making up the company.
The company will want to put strong resources into its more profitable businesses and phase down or drop its weaker ones.
Management’s first step is to identify the key businesses making up the company.
These can be called the strategic business units.
A strategic business unit (SBU) is a unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses.
An SBU can be a company division, a product line within a division, or sometimes a single product or brand.