Business Analysis

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====== SBU Definition ======
===== Is Your Business a Single SBU? =====

The unit of analysis in PIMS® is a Strategic Business Unit (SBU), defined by: (i) the products and services offered, and (ii) the market and customers they are offered to (e.g. geography, channel, customer types, industry, etc.). If some elements of either set are radically different from others, you should split into multiple SBUs that are relatively homogeneous in each set.

The following is a quick check to see if your business is a single or multiple SBUs. When you look at a possible split, are there significant differences in aspects of your:

Products and services:
  *     Production processes
  *     Technical specifications
  *     Maturity or life cycle stage
  *     Customisation or distribution channels

Market and customers:
  *     Main geographical focus
  *     Main competitors
  *     Types of customer
  *     Your competitive strength (relative share, quality etc.)

Significant differences in more than one of these areas indicates that you should consider splitting into more than one SBU, but only if you have separable costs and assets (or relevant allocation keys, e.g. sales, gross margin, number of products, number of customers). Once an SBU is defined, you should then list the set of competitors (who the target customers can buy these products and services from) and the set of relevant people and assets (the supply chain which creates and delivers these products and services to the customers, excluding “arms-length” purchases) to check your definition.

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