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Highly diversified corporations often combine similar divisions into strategic business units (SBUs). This helps coordinate activities and attain synergies. ConAgra is an example of a company with dozens of divisions grouped into three SBUs -- food service, retail, and agricultural products. SBUs are typically run as profit centers.
The primary advantage of the SBU structure is that it makes planning and control more manageable. The disadvantages include it may be difficult to realize synergies even among similar divisions and the additional hierarchical level of an SBU adds personnel and overhead expenses.
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What is the relationship between constant marginal cost and the overall cost structure of a business?
The relationship between constant marginal cost and the overall cost structure of a business is that when the marginal cost remains constant, it means that the cost of producing each additional unit of output does not change. This can lead to a more predictable and stable overall cost structure for the business, making it easier to plan and manage expenses.
What happens if the price per unit decreases because of competition but the cost structure remains the same?
If the price per unit decreases because of competition but the cost structure remains the same
What is the average fixed cost and how does it impact the overall cost structure of a business?
The average fixed cost is the total fixed costs divided by the quantity of output produced. It represents the cost per unit of production that does not change with the level of output. Fixed costs impact the overall cost structure of a business by influencing the breakeven point and determining the minimum level of production needed to cover these costs. Businesses with high fixed costs may have higher breakeven points and require higher levels of production to achieve profitability.
How can one calculate the average fixed cost for a business?
To calculate the average fixed cost for a business, you divide the total fixed costs by the quantity of output produced. This gives you the cost per unit of fixed expenses incurred by the business.
How does the concept of increasing marginal cost impact the pricing strategy of a business?
The concept of increasing marginal cost affects a business's pricing strategy by influencing the point at which the cost of producing one more unit exceeds the revenue gained from selling that unit. As marginal costs rise, a business may need to adjust its pricing to maintain profitability, potentially leading to higher prices for consumers.
What are the advantages and disadvantages of strategic business unit?
An advantage of a strategic business unit is its ability to react to change. A disadvantage is the need for advanced technology to make decisions.
Walt Disney company has four major strategic business units place them on the BSG matrix?
strategic business unit
What is a SBU?
SBU stands for Strategic Business Unit, which is an independent unit within a larger company with its own business strategy and objectives.
What is statrategic business unit?
Strategic business unit means the core group of the business which takes care of the actual work content of the whole business. it acts as a back bone for the firm to lead the operations.
What does the marketing department provide leadership activities in At the strategic business unit level?
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What is STRATEGIC BUSINESS UNIT head?
The STRATEGIC BUSINESS UNIT head is the one taking care of the proper positioning of sales and marketing strategies to the company's overall business plans. This task includes proper planning, forecasting, marketing, creating policies to Êenhance the company's objectives.Ê
What industry forces might cause a propitious niche to disappear?
Propitious niches can disappear if the external environment and the industry changes. This happens when the market gets smaller because of factors beyond the control of the company and strategic business unit. A smaller market for products and services causes services to be too narrowly demanded. Broader markets with high demands do will cause market niches. The strategic business unit through its own efforts, not only fills the demand, but actually causes the market to expand. The company and Strategic business unit changes due to demands for resources elsewhere in the corporation. This happens when the company is forced to hire and train more qualified workers for the production of current products. Another example would be when the company is forced to market penetrate. This happens when the companys sales need to grow to compensate demand in an existing market with a current product. Market development can also force a business strategic unit to ignore a niche, when the demand of a product is high in market where supply is low. The companies strategic business unit may be forced to cut back on its activities. Its own success in the niche may cause the company to move into nearby niches.
Characteristics of Strategic business unit?
The strategic business unit (SBU) is a separate, specialized subsystem in the company, which acts as an independent company. For the first time SBU concept has been applied by the U.S. company General Electric. SBUs are small businesses with a high functional and decision-making autonomy. Such units may or may not need to work closely with companies, from which they have been separated. SBUs can be used to prepare the diversified company's strategy.
What does SRU stand for?
SRU stands for: Strategic Response Unit.
Is organism the cell the basic unit of structure?
The cell is the basic unit of structure of an organism.
What has the author James Calvert Scott written?
James Calvert Scott has written: 'The statistical significance of multilevel materials on posttest scores for a basic business unit on business organizational structure' -- subject(s): Business education
What is a business unit?
A business unit is a portion of a business that works together to meet a specific objective. A business unit can perform well, while the organization can perform poorly.
