The difference between the success and failure of an organization's strategy often comes down to how well the organization executes the strategy at all levels. One of the key areas for strategy execution is the organization's strategic business units (SBUs) – smaller, distinct entities within the larger organization that serve specific external markets and may even have their own, distinct business strategy that merely complements the larger organization's.

For a health care system, the SBUs might be the individual hospitals or clinics within the system. For a school district, the SBUs would be either school zones within the district (if it is a large district) or the schools themselves and different departments such as the Curriculum department and the Operations department.