What criteria to be considered in classifying an SBU?

The criteria that are to be considered in classifying an organizational unit as a Strategic Business Unit are:-

• An SBU would serve an external market rather than an internal market,
• It should have a clear set of external competitors which it is trying to equal or by-pass,
• It should have control over its own destiny,
• Its performance must be measurable in terms of profit and loss that is it should be a true profit center.