It is the senior executive who tries to avoid operational problems of tactical planning and who views the future in terms of longer time horizon].
Following the ‘growth-vector matrix’ of Ansoff, a company while pursuing growth strategy as a part of its corporate planning may adopt any of two approaches: expansion and diversification.
In 1970, the company made a deliberate attempt, through the cool-Ova campaign, to create Oval-tine, drunk in cold instead of warm milk, as an ‘anytime’ beverage.
Similarly, the introduction of ‘junior Horlicks’ in addition to age-old Horlicks (a popular beverage) is a case in point.
When identified, SBUs generally have the following characteristics:i. They are a single business or collection of related businesses. How should this effort be financed (e.g., reducing dividends, selling off some marketable securities, seeking term loans etc.)? Should it merge with a competitor in order to survive or in order to maximise growth opportunities? Can it best run the business by automating or totally reorganising?
When a company produces one product or a set of products so closely related that they belong to the same industry, we can think of strategic planning at the business unit level or Strategic Business Units (SBUs). They have their own set of competitors which can be and should be managed in a manner reasonably independent of other businesses within a The following points highlight the three levels of strategic planning process. The factors like volume of business administration, future plans, market characteristics, etc. For a multi-business firm, an SBU is an operating division which serves a distinct product-market segment or a well-defined set of customers or a geographic area. Concern is focused on establishing or modifying the product, R&D, production, finance, marketing, personnel and accounting policies in such a way that each is consistent with the others and the company’s overall objectives are likely to be met. Strategic product planning is a critical element in overall strategic planning of a multi- business firm. Thus, depending on the type of organisation, an SBU could be a single product, product line, a department of business, or even the State’s mental health agency. At SBU level the strategic planning focuses on orienting the firm to take advantage of external environmental opportunities efficiently and effectively. The answers to such questions are mostly contingent upon a wide range of criteria like SBU goals, personal values and goals of decision makers, resources available within, and the threats and opportunities in the environment.The SBU is given authority to make its own strategic decisions within the corporate guidelines as long as it meets corporate objectives (i.e., goal congruence). Another important aspect is that an SBU of a large multi-industry corporation may itself be an industrial giant with large number of relatively large subsidiaries. Is it producing appropriate products or providing appropriate services? Strategic product planning is concerned with asking certain basic questions about the current set of products and potential new ones.The strategies generally applied at this SBU level are usually designed to answer basic questions like: 1. For example, one firm which made the range of cosmetics of the industry was offered the opportunity to purchase the ‘beauty’ soaps’ product line.C P is reflected in a structure of plans covering three to four years maximum.Involving strategies, plans must be correlated and integrated which cover each functional areas of business, viz., finance, products, R&D (technology), markets, manpower.The company opted for the opportunity since it allowed them to serve their current customers even better without appreciable modifications in the existing plant and with little retraining of the same sales force.Moreover, the company knew that no other firm in this industry would be able to match the breadth of their augmented product line and that they themselves would require years to develop a comparable set of products.For example, many firms make ‘belt buckles’; however, one small firm designs speciality ‘belt buckles’ with corporate logos for companies.Product life cycle (PLC) is another concept which is of value for taking strategic actions.