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Business Unit Strategy and its Main Elements

The three elements of a business unit strategy:

  1. Where to compete
  2. How to compete
  3. How to design the business system accordingly

Definition of an SBU

Some traditional characteristics

A Business Unit Strategy is about…

business unit strategy

An integrated set of actions means that the components parts of a strategy must complement one another, and must be executed at the proper time – a reference to the “when to compete.”

To design the entire value system refers to the industry supply chain, the company value chain, and the competitive structure therein with respect to the defined where to compete—a reference to the “where and how to compete.”

To continuously create and redefine competitive actions means that true competitive advantage must be lasting.

Through superior customer value implies that the definition of competitive advantage over a competitor is providing superior value to the customer relative to the cost required.