A business segment, group, of division is often too large in terms of product and market composition to use in strategic analysis and planning, so it is divided into more specific strategic units. A popular name for these units is the strategic business unit (SBU).

Typically, SBUs display product and customer group similarities. A strategic business unit is a single product or brand, a line of products, or a mix of relay products that meets a common market need or a group of related needs, and the unit's management is responsible for all (or most) of the basic business functions.

The characteristic of the ideal SBU are described in Exhibit 2-8.

Typically, the SBU has its own strategy rat than a shared strategy with another business area. It is a cohesive organisational unit t is separately managed and produces sales and profit results. An important issue is whether the use of SBUs to guide strategy and organisation enhances corporate performance.

AMR Corporation, parent of American Airlines, recognized as a well managed transportation services company. American's informal technology business is an interesting example of the use of strategic business un SABER is divided into three business areas:

(1) the SABER Computer Services Divas provides support for American Airlines;

(2) the SABER Travel Information Network markets reservations, ticketing, and other services to travel agencies and corporation and

(3) AMR Information Services, Inc., has seven strategic business units that mar information services to other airlines, hotel and car rental companies, freight shippers; telemarketers and provide technical training and data-entry services.27