Strategic business area (ASA)

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The company must carry out a strategic segmentation or macro segmentation to know the possibilities offered by a portfolio of activities and to evaluate the general situation of the company. With this in mind, the company must divide its activities into homogeneous segments: the ASA. The company must refer to these to effectively formulate a strategy to achieve its medium and long-term objectives. An analysis, as well as a diagnosis of each ASA is necessary to do this.

The ASA includes several product/market pairs that have the same customer base, the same technology, and identifiable competitors. It is a set of products that have the same resources and the same competitors in a specific market. Products of one ASA can thus be subject to the same specific strategy as products of different DAS.

Several tools are available today for the analysis of a ASA. We distinguish, for example, the checklist and the BCG matrix (Boston Consulting Group). Depending on the situation, the company may abandon its commitment and consequently abandon the ASA. It can also commit and do everything possible to gain market share and, consequently, improve its profitability. In this case, it must have significant liquidity.

To evaluate the importance of a business area, the company must consider certain elements, such as turnover or sales volume and potential profitability or profit rate. This is where marketing comes in. The interest of a field of activity is based on 2 essential factors: the attractiveness of the global market and the current and potential competitiveness of the company in the targeted market.