Line of Business vs. Business Segment

At my job, we sometimes mix definitions when referring to Line of Business (LOB) versus Business Segment, so I wanted to get some clarity on the difference between the two.

Business Segment

Typically also referred to as a business unit, a business segment is generally a major division in a large corporation. For example, General Electric has GE Energy, GE Capital, GE Healthcare, etc. These units often act like their own businesses complete with their own presidents, vice presidents, etc. Their revenue is also usually reported individually in the Income Statement. Below is an example of what a company with business segments might look like.


Line of Business

Unlike a business segment, where an entire corporate structure is necessary, a LOB is small classification of products  that might reside in a business segment.  Wikipedia describes LOB as:

Line of business (LOB) is a general term which often refers to a set of one or more highly related products which service a particular customer transaction or business need.


Going forward, I definitely need to keep these two separate since they are not the same things.



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