Framework for Defining Business Segments PPT

This PPT slide, part of the 26-slide Organisation Design 101 - Best Practice PowerPoint presentation, titled "Business Definition" outlines a framework for determining how many distinct businesses exist within an organization. It emphasizes the importance of evaluating shared attributes among customers, costs, competitors, and competencies. The left side of the slide presents a scenario where businesses share the same customers, cost structures, competitors, and competencies, leading to the conclusion that they can be classified as "One business."

Conversely, the right side illustrates a scenario where businesses differ in these aspects, suggesting they should be treated as "Separate businesses." The slide effectively communicates that the degree of shared characteristics directly influences the classification of business segments.

The section titled "Why is business definition important?" highlights critical insights. It indicates that understanding whether segments are more profitably operated as a single entity or as separate businesses is essential. This distinction can significantly impact strategic decisions, particularly in contexts like mergers, acquisitions, or market entry strategies.

The slide also points out that defining business segments helps identify what drives profitability within an industry. This understanding serves as a foundation for strategic analysis and informed decision-making.

Overall, the slide presents a structured approach to business classification, offering valuable insights for executives considering organizational design and strategic alignment. It encourages a thorough evaluation of shared characteristics to optimize operational efficiency and profitability.

This slide is part of the Organisation Design 101 - Best Practice PowerPoint presentation.

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