Business Unit

c) Shared Financial Performance

b) Market-Based

c) Reduced Flexibility

a) Collaboration between BUs

b) It is a structure that can be beneficial but requires careful management.

Here is a possible solution for the exercise:

**1. Potential Business Units:**

• **Business Unit 1: Consumer Electronics**: Focusing on mainstream consumer electronics products such as smartphones, tablets, laptops, and smart home devices. This BU would target a wide range of consumers across different age groups and income levels.
• **Business Unit 2: Premium Audio & Video**: Focusing on high-end audio and video equipment, including premium headphones, speakers, televisions, and home theater systems. This BU would target a niche market of audiophiles and discerning consumers seeking premium sound and visual experiences.

**2. Specific Focus:**

• **Business Unit 1:** * Products: Smartphones, tablets, laptops, smart home devices, etc. * Market: Mass consumer market * Customer Segments: A wide range of consumers across age groups and income levels.
• **Business Unit 2:** * Products: Premium headphones, speakers, televisions, home theater systems, etc. * Market: Niche market of audiophiles and discerning consumers. * Customer Segments: Consumers seeking high-quality audio and video experiences, willing to pay a premium for superior products.

**3. Benefits and Challenges:**

Benefits:

• **Increased Focus:** Each BU can concentrate resources and expertise on their specific product lines and target markets, leading to improved efficiency and innovation.
• **Enhanced Responsiveness:** BUs can quickly adapt to changing market conditions and customer needs in their respective segments.
• **Improved Accountability:** Each BU is held responsible for its performance, fostering a culture of ownership and responsibility.
• **Simplified Management:** The structure allows for more manageable units, enabling more effective communication and decision-making.

Challenges:

• **Potential for Siloing:** BUs may become isolated, hindering collaboration and knowledge sharing across the organization, particularly between the two BUs. For example, there may be potential for overlapping development efforts between the two BUs. A strong communication strategy is needed to avoid this.
• **Coordination Challenges:** Maintaining alignment and communication between BUs can be complex, requiring strong leadership and clear communication strategies. There is the risk of duplicated efforts in certain areas (e.g., marketing or supply chain) if proper coordination is not in place.