Business Mix Summary

View Template for: Business Mix Summary

The purpose of this section is to list the businesses of the corporation (or group) and, for each, to indicate the industry attractiveness, competitive position, and other relevant information. This analysis is critical in order to allocate corporate resources in an optimal manner.

In practice, as soon as a company is disciplined enough to maintain a single list of the company's SBUs, it is fairly easy to construct a table of the most important information of the company.

The table on the template web page lists several key pieces of strategic information that are frequently overlooked when reviewing corporate businesses. For each SBU, the data include:

• a measure to indicate the industry attractiveness (in terms of the industry's expected future profitability);
• a measure of the SBU's competitive position within the industry;
• the SBU's generic strategy (cost leadership, cost focus, differentiation, differentiation focus, or none);
• the SBU's actual or planned competitive advantage (i.e., what the SBU does better than the competition).

The data items presented on the template web page should be extended based on the needs of the corporation. The vital statistics page at the beginning of the SBU document represent a good start of the financial and strategic data that should be maintained. Ideally, this corporate database of information should be automatically updated from the SBU Competitive Strategy documents.

In filling out the template web page it is helpful to use consistent choices and consistent standards for scoring each business unit in order to help corporate management make relative judgments about each SBU.

For example:

For industry attractiveness scoring, use:

Very High (5); High (4); Medium (3); Low (2); Very Low (1)

For competitive positioning scoring, use:

Very High (5); High (4); Medium (3); Low (2); Very Low (1)

For generic strategy, chose one of the following:

Cost Leadership; Cost Focus; Differentiation; Differentiation Focus; None.

For #1 competitive advantage, identify the SBU's current or planned competitive advantage.

Caution: when analyzing each business unit, it is important to remember that some businesses do in fact support other corporate businesses. Measuring and analyzing businesses independently, without measuring their value to the total corporation, can sometimes lead to poor decisions.

Example of Software Company XYZ

XYZ's Strategic Business Units	Industry Attrac- tiveness	Compet- itive Position	Generic Strategy	Compet- itive Advantage
XYZ Budgeting Software Corp	High	Low	Cost Focus	Low cost design
XYZ Fin Statement Software	Medium	High	Cost Focus	Low cost design
XYZ Electronic Tax Planning Co	High	Medium	Cost Focus	Low cost design
XYZ Personal Legal Forms, Inc.	Low	Low	Cost Focus	Low cost design
XYZ Acquisition Software Tools	High	Medium	Cost Leader	Low cost design

 

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Copyright 2008 Alan S. Michaels               Alan S. Michaels    All Rights Reserved.
Last modified:   Tuesday February 19, 2008