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SBU LEVEL STRATEGY

ANJALI GAUTAM (19)
VIKAS GIRI (20)
MAHIMA GOTEKAR (21)
JYOTI GUPTA (22)
RAMKRISHNA GUPTA (23)
OMKAR HATE (24)
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SBU LEVEL STRATEGY
 Strategic Business Unit (SBU) implies an independently managed division of a
large company, having its own vision, mission and objectives, whose planning is
done separately from other businesses of the company.

 The vision, mission and objectives of the division are both distinct from the parent
enterprise and elemental to the long-term performance of the enterprise.
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COMPETITIVE STRATEGY
AT BUSINESS LEVEL
 COST LEADERSHIP
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STRATEGY
 The concept of cost leadership was developed by Michael Porter.

 Cost leadership is establishing a competitive advantage by having the lowest cost of

operation in the industry.

 It describes how companies get ahead by lowering their operating costs beneath
those of others in the same business.
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ACHIEVING COST
LEADERSHIP
DEMAND ECONOMIES
FORECASTIN STANDARDIZATION
G OF SCALE

USE OF COST SAVING DIFFERENTIATION

TECHNOLOGIES WITHHOLDING

AIMING AT AVERAGE CUSTOMER

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CHARACTERISTICS
 The ability to charge low prices and still make a profit is challenging.

 Cost leaders manage to do so by emphasizing efficiency.

 As a part of the effort to be efficient, most cost leaders spend little on

advertising, market research, research and development.

 Many cost leaders rely on economies of scale to achieve efficiency which is

created by selling more items.
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BENEFITS

 COST ADVANTAGE

 CAPACITY TO ABSORB INCREASED PRICE

 PRICE REDUCTION

 MINIMIZES THREAT

 EFFECTIVE ENTRY BARRIER

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 Possibility of duplication of cost reduction techniques.

 Dilution of customer focus.

 Reduction in scope of Product & Services.

 Great threat of technological shifts.

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CONCLUSION

 Cost leadership strategy has a broader scope.

 Achieving a Cost leadership strategy might not be for every company.

 Cost leadership are difficult to maintain due to imitation and competition.

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Thank You