What is a line of business?
A line of business (LOB) is a product or service a company offers to serve a specific customer need. A bank, for example, provides LOBs such as loans, overdrafts, and mortgages for companies of all sizes and individuals who require capital.
For businesses of any size, it’s helpful to consider LOBs for many reasons, which we will discuss next.
Why is a line of business important?
A business line is important to any business providing products or services to clients, mainly when a company has multiple LOBs providing many lines of similar products.
There are four main reasons that LOBs are helpful in business:
- Improves business agility.
- Integral to business strategy.
- Optimizes customer experience.
- Promotes growth.
Through product or service life-cycle management, a line of business maintains the journey from start to finish for each item. LOBs allow you to oversee high-level collaborations that initiate processes where shared services take charge of more specific tasks.
As the product or service progresses through modifications and adaptations, life-cycle stages will be integral to these transformations to varying extents.
The value stream management of each Line Of Business (LOB) includes specific service units for its products or services. At the uppermost level, these customized service units join up with others in a way that either directly or indirectly involves shared services to manage the thorough assignments.
LOBs are key to successful product and service development, whatever sector the product is developed for.
Various customers use the same LOB differently, meaning companies must develop different products within the same LOB. For example, the insurance required by a large enterprise would be different from the needs of a small homeowner, though the products would be similar despite serving different needs.
Line of Business Examples
There are several lines of business, but below we will focus on the three most popular: retail electronics, banking, and insurance.
Line of business: Retail electronics
Electronics retailers are concerned with the retail LOB. Examples of products under this LOB include:
- Mobile Devices.
- TVs, Set Top Boxes, Monitors.
- Laptops, Tablets, Computers.
- Appliances & White Goods.
- Computers, Printers, Scanners.
Line of business: Banking
The main LOB for banking is finances. Products and services under this LOB relate to money management or borrowing, such as:
- Mortgages, overdrafts
- Credit cards;
- Forms of credit and loan programs
- Corporate, small business, and personal bank accounts.
Line of business: Insurance
For the insurance sector, insurance is the primary LOB, and services offered within this are:
- Life insurance.
- Health insurance.
- Home and property insurance.
- Commercial business insurance.
How do I set up a line of business?
To set up a line of business, you must first define the sector you’re working within. If you provide loans, your LOB is finance. If you sell items online, your LOB is retail. Once you have defined your LOB, research existing customer needs and develop a product to fulfill these needs. The key to setting up a LOB is to define your target market to ensure you fulfill their need.
What is another word for line of business?
There are many other words for a line of business. Examples include line; product line; line of products; branch; sector of industry; branch of industry; line of business; economic sector; field; field of operation; line of merchandise; business line; trade; line of business; branch of business. They all mean a line of business.