what is sbu in marketing

A Strategic Business Unit (SBU) is a fully-functional unit of a business that has its own vision, mission, and objectives and is managed independently. It is like a mini-business within a larger organization that focuses on a specific product offering and market segment. SBUs are typically small business entities within a larger organization that deal with multiple products and services. They operate like profit centers with separate business divisions with a set product line or specific goods for a particular location or target audience. SBUs are formed within enterprises that usually have huge businesses worldwide providing different goods and services. The SBU structure allows companies to adapt quickly to changing industry environments. SBUs provide an effective way for companies to create a competitive advantage by giving them autonomy in decision-making as well as helping them respond rapidly without excessive bureaucracy getting in the way.