Q:3) what are different types of Strategic Missions at SBU level? How do these missions affectStrategic Planning process and Budgeting at SBU Level?Different Types of Strategic Missions:Business Unit Mission:
In a diversified firm one of the important tasks of senior management is resource deployment, that is, makedecisions regarding the use of the cash generated from some business units to finance growth in other business units. Several planning models have been developed to help corporate level managers of diversified firms to effectively allocate resources. These models suggest that a firm has business units inseveral categories, identified by their mission; the appropriate strategies for each category differ. Together,the several units make up a portfolio, the components of which differ as to their risk/reward characteristics just as the components of an investment portfolio differ. Both the corporate 'office and the business unitgeneral manager are involved in identifying the missions of individual business units. Of the many planning models, two of the most widely used are Boston Consulting Group's two-by-two growth-sharematrix and General Electric Company/McKinsey & Company's three-by-three industry attractiveness- business strength matrix. While these models differ in the methodologies they use to develop the mostappropriate missions for the various business units, they have the same set of missions from which tochoose: build, hold, harvest, and divest.
This mission implies an objective of increased market share, even at the expense of short-term
earnings and cash flow (e.g., Merck's bio-technology, Black and Decker's handheld electrictools).
This strategic mission is geared to the protection of the business unit's marketshare and competitive position (e.g.: IBM's mainframe computers).
This mission has the objective of maximizing short-term earnings and cashflow, even at the expense of market share (e.g., American Brands' tobacco products,General Electric's and Sylvania's light bulbs)
This mission indicates a decision to withdraw from the business either through a process of slow liquidation or outright sale. While the planning models can aid in theformulation of missions, they are not cook books. A business unit's position on a planning grid should not be the sole basis for deciding its mission.
Business Unit Competitive Advantage:
Every business unit should develop acompetitive advantage in order to accomplish its mission. Three interrelated questionshave to be considered in developing the business unit's competitive= advantage. First,what is the structure of the industry in which the business unit operates? Second, how