Strategic Business Unit (SBU) Matrix

The Strategic Business Unit (SBU) Matrix is a tool used by organizations to analyze and manage their portfolio of businesses or products. It helps in identifying which units to invest in, develop, or divest based on their market performance and strategic importance.

At a very high level, the Strategic Business Unit (SBU) Matrix is used in the context of business, strategy, management.

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What is the Strategic Business Unit (SBU) Matrix?

A visual explanation is shown in the image above. The Strategic Business Unit (SBU) Matrix can be described as a matrix with the following quadrants:

  1. Stars: High market share in a high-growth market; e.g., a leading tech product in an emerging industry.
  2. Question Marks: Low market share in a high-growth market; e.g., a new entrant in a rapidly growing sector.
  3. Cash Cows: High market share in a low-growth market; e.g., a well-established consumer goods product.
  4. Dogs: Low market share in a low-growth market; e.g., an outdated product in a declining industry.

What is the purpose of the Strategic Business Unit (SBU) Matrix?

The Strategic Business Unit (SBU) Matrix is a strategic planning tool that helps organizations evaluate their various business units or product lines. The matrix is typically divided into four quadrants based on two key dimensions: market growth rate and relative market share. This allows companies to categorize their SBUs into four categories: Stars, Question Marks, Cash Cows, and Dogs.

Stars are units with high market share in a fast-growing industry. They often require significant investment to maintain their position but have the potential to become Cash Cows as the market matures.

Question Marks are units with low market share in a high-growth market. These units are uncertain; they could either become Stars with the right investment or fail and become Dogs.

Cash Cows are units with high market share in a slow-growing market. These units generate consistent cash flow with little investment and can be used to fund other units.

Dogs are units with low market share in a low-growth market. These units typically generate low returns and may be candidates for divestiture.

By using the SBU Matrix, companies can make informed decisions about where to allocate resources, which units to develop, and which ones to divest, thereby optimizing their overall portfolio performance.


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What templates are related to Strategic Business Unit (SBU) Matrix?

The following templates can also be categorized as business, strategy, management and are therefore related to Strategic Business Unit (SBU) Matrix: Product-Market Matrix, 4 Ps Marketing Mix Matrix, AI Capability-Value Proposition Alignment Matrix, AI Innovation-Value Alignment Matrix, AI Maturity Matrix, AI-Value Proposition Alignment Matrix, AI-Value Proposition Matrix, AIDA Marketing Matrix. You can browse them using the menu above.

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