Association of Chartered Certified Accountants (ACCA) Certification Practice Test

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What do strategic business units (SBUs) represent in an organization?

Operational departments
The overall revenue sources
Divisions focused on particular market areas
Executes strategic plans

The correct answer is: Divisions focused on particular market areas

Strategic business units (SBUs) are divisions within an organization that focus on specific market segments or product lines. They are structured to operate semi-independently, allowing them to tailor their strategies, operational approaches, and resources to meet the particular needs of a defined customer group or market. This focus enables SBUs to develop specialized strategies that can enhance competitiveness and drive growth in targeted areas. For example, a large corporation might have separate SBUs for consumer electronics and healthcare products, each with its own management and strategic objectives aligned with its unique market dynamics. While operational departments and overall revenue sources are important aspects of an organization, they do not encapsulate the essence of SBUs as these units are specifically created to address distinct market segments. Likewise, while executing strategic plans is a crucial function that SBUs perform, it does not fully define what they are; rather, SBUs are the vehicles through which those strategic plans targeting specific markets are carried out.