COMILLA UNIVERSITY

COMILLA-3506, BANGLADESH
DEPARTMENT OF MANAGEMENT STUDIES
BBA PROGRAM
ASSIGNMENT

COURSE TITLE: Fundamentals Of Marketing

SUBMITTED TO:
MD. Siddikur Rahman
LECTURER
DEPARTMENT OF MANAGEMENT STUDIES
COMILLA UNIVERSITY
SUBMITTED FROM:
MD. Meraj Hossain
ID NO: 12005028
BATCH: 14TH
DEPARTMENT OF MANAGEMENT
STUDIES
EMAIL:
meherajhossain1418@gmail.com
TH
DATE OF SUBMISSION: 26 NOVEMBER 2020
 Assignment
On
What is SBU unit in marketing? Write a Bangladeshi company's SBU unit and its benefits.

SBU: In business, a strategic business unit (SBU) is a profit center which focuses on

product offering and market segment. SBUs typically have a discrete marketing plan, analysis
of competition, and marketing campaign, even though they may be part of a larger business
entity. A strategic business unit is a separate, specialised subsystem in the company which acts
as an independent company. Having SBU assists organisations to plan their strategies and
make manufacturing decisions. The concept provides a review of the critical issues on an SBU
benefits and success factors.

For Example : Walton Bangladesh as a company makes consumer durables. It makes

refrigerators, Laptops, washing machines, air-conditioners as well as televisions. These small
units are formed as separate SBUs so that revenues, costs as well as profits can be tracked
independently. Once a unit is given an SBU status, it can make its own decisions, investments,
budgets etc. It will be quick to react when the product market takes a shift or changes start
happening before the shift happens.

Benefits of SBU (strategic business unit):-

Responsibility – One of the first role of strategic business units is to
assign responsibility and more importantly outsource responsibility to
others. With this, the top management has an overview of work being done
in each individual unit and they do not have to get involved in day to day
activities for these strategic business units.

Accountability – When handling multiple brands or products, it is easier if

there are separate business units which are accountable for the success or
failure of the business or product. By making these business units
accountable, the company can directly take a call when hard decisions are
to be taken.

Accountancy – Profit and loss and balance sheets will look more prettier
and more manageable if the statements are prepared separately for
separate strategic business units. This makes the accountancy more
transparent and at the same time, when companies have to make
investment decision than this accountancy will come in use for the
company.

Strategy – Companies like Nestle have 4 different strategic units. One

SBU like Maggi deals in Food products, another deals in Dairy products
like Nestle milkmaid, the third SBU deals in Chocolate products
like Kitkat so on and so forth. Thus, in the above example, it is very simple
to change strategy for each business unit because the strategy for each is
independent of the other.

Independence – The managers of the strategic business units get more

independence to manage their own unit which gives them
the opportunity to be more creative and innovative and empowers them for
making decisions. The best thing that can happen for SBU’s are fast
decision making which is possible only when these SBU’s are given
independence to work by themselves.

Funds allocation – The last but not the least advantage of strategic
business units are that funds allocation becomes simpler for the parent
company. Depending on the performance of the SBU, funds allocation can
be done on priority.

Thus, there are many advantages of having strategic business units and it
is highly recommended that any firm which has multiple products adopt
strategic business units in its organization structure.