Your company is organised into strategic business units (SBUs) as is typical of most large international corporations. An SBU is understood as a business unit within the overall corporate identity which is distinguishable from other businesses because it serves a defined external market where management can conduct strategic planning in relation to products and markets. The unique SBU benefits when a firm aggressively promotes in a consistent manner. When companies become very large, they are best thought of as being composed of a number of businesses (or SBUs). (Note: In the broader domain of strategic management, the term “strategic business unit” came into use in the 1960s, largely as a result of General Electric’s many units.)
These organisational entities are large enough and homogeneous enough to exercise control over most strategic factors affecting their performance. They are managed as self-contained planning units for which discrete business strategies can be developed. An SBU can encompass an entire company, or can simply be a smaller part of a company set up to perform a specific task. The SBU has its own business strategy, objectives, and competitors, and these will often be different from those of the parent company.
Recently, the senior management of your company made the strategic decisions to allocate annual funding to each of the SBUs within the company. A new executive (your Instructor) has been hired to head up your strategic business unit. This new executive was hired from another industry and from another company in another industry, so he is still learning about your industry, your company, and your SBU.
You are a member of the organisation responsible for the management of a product portfolio in this SBU. There are a number of projects already in progress, but there has not been a good portfolio management process in place.
The first major act of your new executive was to establish a project portfolio group (your class project team) to develop and implement a portfolio management process for your SBU. You are a member of that team.
Your first task in this project is to develop Part I: Project Proposal of the module project. This is due no later than the end of week 4.
Part I: Project Proposal – due at end of week 4:
You should immediately:
- Choose an industry (your choice—but it is preferable for you to be familiar with the industry).
- Choose any company in the industry. You will need to be able to derive the company’s high-level mission and strategies (from annual report, etc.). It does not necessarily need to be the firm you work for, but you should have some familiarity with the company. Your current or a past employer could be a good candidate.
- Invent a strategic business unit (SBU) which has a specified portfolio of products. This does not necessarily have to match the real world; make up a scenario if necessary.
- Invent the mission and strategies of the SBU or research them on the Internet if the SBU is real. They should be consistent with genuine company mission and strategies, but (if you cannot find its actual mission and strategies) they do not have to match the real world—i.e., make them up if necessary.
- This SBU, its mission, and its strategies are then the basis for the development of the project selection criteria and the portfolio management process.
You should send Part I: Project Proposal to your Instructor, who will review the proposed scenario to see that you have created a reasonable scenario you can work with on the project for the rest of this course.
You should summarise this portion in 2–3 pages.
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