SBU(STRATGIC BUSINESS UNIT)

DEFINITION An SBU is a unit of the company that has a separate mission and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organized.

FMCG
ITC HUL P&G Dabur Marico

SBU
ITC:- Foods, Personal Care ,Cigarettes & Cigars HUL:- Foods , Personal Care ,Home Care. Marico:-Hair Care , Edible Oil. P&G:-Baby Care , Hair Care , Fabric Care. Dabur:- Foods , Personal Care , Health Care.

PORTERS GENERIC STRATEGIES

The generic strategies are: 1. Cost leadership, 2. Differentiation, and 3. Focus.

STRATEGY ADOPTED BY COMPANIES

ITC:- Cigarettes & Cigars Strategy Focus :- ITC use Focus strategy for Cigarettes & Cigars SBU. Reason:- Because it satisfy the unique smoking need of its customer.

HUL:- Personal Care Strategy:-Differentiation & cost(for some Product) Reason:-HUL uses differentiation strategy(Dove ,Lakme)for most of products along with cost strategy for some of its products(Lifebuoy,Lux)

P&G:-Baby Care Strategy:-Focus Reason :- Because it caters to very small segment i.e. children between 0-3 yrs of age.

Marico:-Hair Care Strategy:-Cost Leadership Reason:-Marico is cost leader in Hair oil segment by launching different packing of its parachute hair oil at affordable price.

Dabur:-Health Care Strategy:- Differentiation Reason:- Because it satisfy unique need of the customer which no other product in health care segment give example Dabur Chyawanprash.

SEGMENT REVENUES
2009-10 1. Segment R evenue (G ross) a) FMCG - Cigarettes - Others Total FMCG 17,283 3,642 20,925 911 3,862 3,234 28,931 2,672 26,260 2009-10 9,321 3,634 12,955 851 3,862 3,108 20,776 2,622 18,153 15,115 3,014 18,129 1,020 3,846 2,822 25,817 2,674 23,144 2008-09 7,781 3,006 10,786 935 3,846 2,647 18,215 2,603 15,612 14.3 20.8 15.4 (10.7) 0.4 14.6 12.1 (0.1) 13.5 Goly 19.8 20.9 20.1 (9.1) 0.4 17.4 14.1 0.8 16.3 Full Year 2008-09 Goly

b) Hotels c) Agri Business d) Paperboards, Paper & Packaging Total Less : Inter segment revenue Gross sales / income from operns. 2. Segment Revenue ( et) a) FMCG - Cigarettes - Others Total FMCG

b) Hotels c) Agri Business d) Paperboards, Paper & Packaging Total Less : Inter segment revenue Net sales / income from operns.

Yes, Looking at the financial result for the past 2 financial year the company can sustain the competitive advantage over the next 5 years because of its focus strategy. We can see the approx growth of 20% in net profit from Cigarettes business of the company.

ENVIRONMENT CHALLENGES
1] NEGATIVE PUBLICITY FOR SMOKING COULD EFFECT ITS CIGARETE SEGMENT. 2] GOVERNMENT IS UNDER HUGE PRESSURE FROM PUBLIC ORGANISATIONS FOR BANNING TOBACCO PRODUCTS WHICH COULD EFFECT IT ADVERSILY. 3] HIGH COMPETITION FROM ESTABLISHED BRANDS

4] COMPETITION FROM UNBRANDED PRODUCTS. 5] DUE TO TERRORIST ATTACKS THE TOURISM INDUSTRY HAS TAKEN A BACK SEAT WHICH WOULD AFFECT THE HOTEL SEGMENT. 6]POOR MONSOON LEADS TO POOR AGRICULTURALGROWTH WHICH WOULD AFFECT THE AGRI-EXPORTS.

STRENGTHS
1] MANAGING DIVERSE BUSINESS. ITC HAS 105 SUBSIDARIES CONNECTED WITH ITS VARIOUS OPERATIONS. 2] WEALTH OF LOCAL KNOWLEDGE & INTERNATIONAL EXPERTISE HELPS IT TO BE GLOBALLY COMPETITIVE. 3] HIGH QUALITY STANDARD PRODUCTS & SERVICES 4] EXCELLENT EXPORT EARNINGS. 5] HIGHILY PROFESSIONAL MANAGEMENT. 6] EXCELLENT DISTRIBUTION NETWORK. 7] EXCELLENT BRAND MAKING CAPABILITY HELPING IT TO DIVERSIFY IT INTO RETAILING ,IT & HOTELS SEGMENTS

8] A LASTING IMPRESSION BY CATCHY ADS. 9] THE LIFESTYLE RETAILING SEGMENT HAS WON ACCLAIM & MOVING TOWARDS HIGHER SALES. 10]STEADY INCREASE IN THE RETURN ON CAPITAL EMPLOYED. 11] SOPHISTICATED RESEARCH & DEVELOPMENT FACILITIES.

WEAKNESS
1]DIVERSIFICATION INTO VARIOUS LINES IN WHICH IT DOES NOT HAVE MUCH KNOWLEDGE WOULD BE VERY RISKY PROPOSITION. 2] HIGH COMPETITION FROM ESTABLISHED BRANDS WHICH HAS RESULTED IN REDUCTION IN PROFIT MARGINS. 3] STEEP INCREASE IN CIGARETTE TAXES HAS ADVERSILY AFFECTED THE REVENUE EARNED. 4] DUE TO HIGH PRICE OF CIGARETTE, CONSUMERS ARE SWITCHING TO OTHER CHEAPER FORMS OF TOBACCO. 5] ITS HOTEL INDUSTRY HAS STILL NOT CREATED A BIG SHARE IN THE MARKET SIZE.

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