Canonical method

Strategic business areas (SBA): splitting the company in order to decide

What must be established

A useful analysis keeps its controls visible.

  1. 01

    Define the customer groups, the functions served and the technologies or know-how mobilised.

  2. 02

    Compare competitors, success factors, economics, value chain and risks before separating two activities.

  3. 03

    Check that a strategy, resources and a review rule can be assigned to the proposed scope.

RESULT OBTAINED

An SBA map with boundaries, separation criteria, shared dependencies and associated allocation decisions.

Decision reference

Make the next choice more explicit.

DECISION SUPPORTED

When do two activities require genuinely distinct strategies and allocations?

DELIVERABLE TO KEEP

An SBA map with boundaries, separation criteria, shared dependencies and associated allocation decisions.

NEXT ELEMENT TO EXAMINE

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Define the playing field in three dimensions

The starting point distinguishes who is served, which function is fulfilled and by which technology or combination of capabilities. The current product is not enough to define the playing field if several solutions address the same need.

  • Customer groups
  • Functions served
  • Technologies and capabilities
  • Substitutes

Test separation or grouping

Two activities deserve distinct SBAs when their competitors, success factors, value chains or economics impose incompatible choices. Strongly shared critical assets can, on the contrary, make the separation artificial.

  • Competitors
  • Success factors
  • Economic structure
  • Shared assets

Link the split to a decision

Each proposed SBA must make it possible to formulate options, commit or withdraw resources and track performance over a comparable scope. A split that changes no decision only adds a label.

  • Distinct option
  • Resources
  • Accountability
  • Review rule

Example: deciding whether two activities form a single SBA

Two offers sold to the same customers do not necessarily belong to the same SBA. If their technologies, competitors, success factors and critical investments diverge, the grid tests a separation. A shared platform, brand or critical capability can, on the contrary, justify common steering.

  • Comparable customers
  • Distinct technologies
  • Success factors
  • Shared dependency

DECISION ASSET

Boundary test of a strategic business area

The grid compares two activities on their playing field, their success factors and their decision autonomy before proposing a separation.

Playing field

Input
Customers, functions, technologies
Control
Do the three dimensions diverge?
Output
Proposed scope

Competition

Input
Actors and substitutes
Control
Do customer trade-offs differ?
Output
Competitive universe

Success

Input
Costs, access, capabilities
Control
Do the key factors change?
Output
Economic logic

Autonomy

Input
Resources and accountability
Control
Is an independent decision possible?
Output
Separation test
Decision enabled

Group, separate or keep the boundary as a hypothesis to examine.

Guardrail

The number of differences does not produce a verdict. A shared critical dependency can make two activities inseparable despite several gaps.

Resources

Reuse the method and verify its foundations.

Download the SBA grid

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See the canonical definition of marketing strategy→