Process for Defining
Strategically Relevant Businesses
The first and most important question that needs to be addressed when
starting or revisiting corporate strategy is, "What businesses are you
in?" In practice, it is emotionally difficult for many executives to
accept the fact that they might not instantly know the answer to a question that
appears so simple.
The truth of the matter is that because of globalization, advances in
technology, and regulatory changes, the answer is not always simple, and the
answer often changes with time as new industries are created and old industries
restructure or fade away.
The major barrier to defining the corporation's SBUs is psychological. But
once the will to answer the question is at hand, and key managers agree to
openly think about the issue, the process described above will be very useful.
There is no book you can buy that will list the correct answers. Regulatory
and industry databases that categorize different industries are often years
behind the ongoing global restructuring, and they often categorize industries
based on geographical and legal boundaries, rather than strategically relevant
business criteria.
By-pass this first step at your peril.
Step by Step Process
for Defining Strategic Business Units (SBUs)
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