Use below strategic business unit diagram to identify a strategic opportunity including defining market size, defining the actual opportunity, performing customer needs assessment, determining overhead and cost structures and finally defining gross profit and net profit margins. Analyzing these key components, will help you define the parameters of company’s strategic business unit.
Pricing strategy matrix explains types of pricing strategies based on the price (whether low or high) and quality (whether low or high). Low price, low quality is Economy pricing. Low price, high quality is penetration pricing. Low quality, high pricing is Skimming and high price, high quality is Premium. The pricing strategy matrix diagram below shows the relationship between price and quality and relevant pricing strategy.