316 Chapter 93:

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1. Establishing strategic business units 

The purpose of identifying the SBU's is to develop separate strategies and assign appropriate funding. SBU's have 3 characteristics:

· Single business, or collection of related businesses that can be planned separately from the rest of the company.

· It has its own set of competitors.

· It has a manager responsible for strategic planning and profit performance, who controls most of the factors affecting profit.

2. Assigning resources to each strategic business unit

GE/McKinsey Matrix: management could decide to grow, harvest or draw cash from, or hold on to the business.

3. Assessing growth opportunities