Examples of strategic business unit in the following topics:
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- These international operations are pursued as a result of the strategic potential provided by technological developments, making new markets a more convenient and profitable pursuit both in sourcing production and pursuing growth.
- Public Relations: Public image and branding are critical components of most businesses.
- International expansion requires enormous capital investments in many cases, along with the development of a specific strategic business unit (SBU) in order to manage these accounts and operations.
- Through effectively maintaining ethics and a strong public image, companies should create strategic business units with strong international leadership in order to capture value in a constantly expanding global market.
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- Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry.
- Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry.
- Achieving competitive advantage strengthens and positions a business better within the business environment.
- The opportunity cost of cloth production is defined as the amount of wine that must be given up in order to produce one more unit of cloth.
- Thus, England would have the comparative advantage in cloth production relative to Portugal if it must give up less wine to produce another unit of cloth than the amount of wine that Portugal would have to give up to produce another unit of cloth.
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- Through integrating accounting knowledge with strategic decision-making, organizations can improve performance, refine strategy, and mitigate risk.
- Managerial accounting creates additional documents used for internal, strategic decision-making.
- Measuring the contribution per unit of constrained resource is called throughput accounting.
- Some simpler examples of common managerial accounting tasks include developing business metrics, cost-benefit analyses, IT cost transparency, life cycle cost analysis, strategic management advice, sales forecasting, geographically segmented reporting, and rate and volume analysis.
- Integrate a knowledge of accounting with its impact on strategic decision-making
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- In the literature, this is typically called "strategic alignment".
- The three general approaches to setting priorities (also known as developing a strategic plan for the IS function) are:
- IS professionals call the end result of an IS planning process "strategic alignment", which simply means that the strategic goals of the IS function are aligned with the strategic goals of the organization.
- Development of a formal plan usually involves interviewing managers in each organizational unit to obtain their perspectives on issues such as:
- plans of individual organizational units developed in support of the organization's plan
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- This creates the economic advantage of specialization, and enables multiple strategic partners to collaborate on the design, production, and distribution of countless goods and services.
- Your sound engineers are some of the best in the business, but you have limited resources.
- Building relationships with various strategic partners along your value chain can be a significant source of competitive advantage and agility in the modern, hugely fast-paced world of business.
- Economies of Scale – On a per output basis, it is often the case that higher volume leads to lower costs per unit.
- This higher degree of organizational inertia is likely to significantly reduce a business' ability to progress and adapt to change.
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- Market share is the percentage of a market (defined in terms of either units or revenue) accounted for by a specific entity.
- Conversely, losses in market share can signal serious long-term problems that require strategic adjustments.
- Increasing market share is one of the most important objectives of business.
- The main advantage of using market share as a measure of business performance is that it is less dependent upon macroenvironmental variables, such as the state of the economy or changes in tax policy.
- The reasons for these disparities include variations in the lenses through which share is viewed (units versus dollars), where in the channel the measurements are taken (shipments from manufacturers versus consumer purchases), market definition (scope of the competitive universe), and measurement error.
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- By effectively managing these issues, a business can achieve optimal inventory levels.
- However, the management process is on-going as a business and its needs shift and respond to the wider environment.
- Economies of scale: To deliver one unit of product at a time, and in response to the specific need and location of a given user, would be costly and logistically difficult.
- Supply chain activities can be grouped into strategic, tactical, and operational levels.
- Strategic: Network optimization, including the number, location, and size of warehousing, distribution centers, and facilities.
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- The cost of goods sold (COGS) is a highly relevant indicator for the health of business operations, as it is a variable cost directly applied to each item sold on a per unit basis.
- This calculation allows the business to see just how much it costs to source, product, inventory, manage, and distribute organizational products and services.
- From a general strategic point of view, the COGS when compared to the consumer willingness to pay is the key indication of whether or not the production of a certain product (at a certain volume) will yield long-term sustainable profits.
- Average Cost - Under this COGS method, the overall per unit production cost is averaged across the entire recording period.
- Understand how to calculate COGS under various recording methods, and recognize the value of this calculation strategically in terms of production efficiency
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- The traditional approach to manufacturing management promotes a strong focus on machine and labor utilization.The view was that if managers make sure that workers and machines are always busy, then surely the factory will be productive and efficient.This approach is called the "push" system of manufacturing, where raw material and work-in-process is continuously pushed through the factory in the pursuit of high utilization.The problem with this approach is that it usually produces high levels of inventories, long lead times, overtime costs, high levels of potential rework, and workers who are competing with one another rather than working cooperatively.
- In contrast to the push system, JIT espouses a "demand-pull" system that operates on the rule that work should flow to a work center only if that work center needs more work.If a work center is already occupied with work activity, the upstream work center should stop production until the downstream work center communicates a need for more material.The emphasis on maintaining high utilization is removed in a JIT environment.The focus of a JIT environment is on addressing the challenges that affect the overall effectiveness of the factory (setup time reduction, quality improvement, enhanced production techniques, waste elimination, etc. ) in meeting its strategic goals, rather than allowing excess inventory to cover up inefficiencies that reduce the factory's competitiveness.
- Traditional production management philosophy promoted the notion that long production runs of the same item were the key to driving down unit costs.
- To keep unit production costs under control, 3M studied the setups on its coating machines.
- The result was that 3M could maintain low unit costs on its coating machines while producing small lots of hundreds of products to meet market demand quickly.
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- Reviewer: Ronald F Farina (Daniels College of Business, University of Denver, USA)