The business portfolio should include brief information about the training of the team`s top players, their experiences and awards, the refresher courses they have taken and a list of the company`s awards. The first step in planning is to identify different strategic business units (SBUs) in a business portfolio. SBU refers to the unit of a company that can be planned independently of other companies and has a distinct mission and purpose. Typically, an SBU can be a division, a product line, or even a single brand. More or less, it depends on the type and organization of the company. They can also be individual business units, often referred to as strategic business units or SBUs. Understanding and maintaining a company`s business portfolio is important, as gaining a competitive advantage is important to achieve business goals. Managing and planning a business has time constraints as one of the biggest hurdles. It is, in fact, an essential part of any company`s development process. The growth share matrix developed by Boston Consulting Group can be applied to both types of portfolios, but in different ways, explique-t-NetMBA.com.

The Growth Share Matrix classifies company investments or markets into one of four categories: star, cash cow, question mark and dog. Although the growth share matrix is applied to both portfolios, they still differ in application methodology. Readers interested in learning more about the methodological and technical underpinnings of the models and portfolio approaches discussed in this article are invited to consult the following published and unpublished documents. In general, the portfolio should be structured to contain all significant options available to management for the use of its resources. However, the entity should not be organized as resource allocation units. If this is not the case, consideration should be given to reorganizing resources so that resource allocation requirements correspond to the levels and units of the portfolio. From the introduction to a team of experts slide, each business portfolio should contain important information. We have described them in more detail on our Corporate Portfolio Models webpage. But we`ll also be happy to expand on that now to summarize and give you more than a little bit of what it`s all about.

Now, let`s understand the business portfolio more deeply and unravel the critical concepts associated with the portfolios created for each business model – Before deciding on an existing product portfolio model or designing a new one, management must define the selected dimensions. The importance of operational definitions for the selected dimensions, for both individual and composite variables, should not be underestimated. They could significantly alter the results. Unlike the growth/equity matrix approach, portfolio models that use composite dimensions rely heavily on management`s judgment to identify relevant factors and determine their materiality. Identifying these factors requires assumptions about the relationships between them and how they will evolve over time. The healthy result of this process is to encourage strategic thinking, but unlike the growth/equity matrix framework, it places significant demands on management time. When designing the portfolio, senior managers should not leave it to employees to generate strategic options. Often, senior executives prefer to position themselves as evaluators, but their involvement in the creative process is crucial for the company.

Employees developing the portfolio should implement a resource allocation process to guide management in allocating financial and physical resources between existing and new parts of the portfolio. A product portfolio, on the other hand, is linked to a company`s list of physical items. It has to do with the products they have placed in the market they have chosen. The most common portfolio approach is based on the dimensions of market share and market growth. In contrast, the directional policy matrix is based on industry profitability and competitive position, while the product performance matrix allows for the selection of other dimensions that management deems appropriate. The four standardized portfolio models are based on a matrix where one axis represents the strength of the product or company in terms of market share or a broader characteristic, while the other represents the attractiveness of the industry or market. These models use two approaches to measure axes: one is based on a single measurable criterion along each axis (e.g. Relative market share and market growth), the other uses composite measures consisting of a set of objective and subjective factors to characterize each axis (e.g., firm strengths and industry attractiveness). Such constraints do not make portfolio models attractive in matrix form. The most recent AHP model uses a hierarchical structure and allows full flexibility in dimension selection. The risk-return approach is based on the graphical or mathematical generation of effective limits.

For a large organization, SBUs operating in different markets can be objectively compared to the parameters of value creation potential, risk and suitability, and finance. Management systems help to highlight impacts and trade-offs in the choice of resource allocation. As a result, the management system improves the definition of objectives and a corresponding portfolio and integration. In our complex business environment, companies large and small continually assess the compatibility of their strategy for each product or service – whether existing or planned – with the organization`s needs, resources and objectives. Should we be in this area? Should we add a new business? How can we gain and maintain a substantial market share? Sometimes we want to integrate everything, and we`d better breathe, filter, judge, and then have fun with how easy some company documents can be done. Harness the power that comes with specificity, meditative actions, and exclusivity over what best serves your brand, business presentation, and published materials. The market plays a crucial role in a company`s portfolio planning. It provides information about opportunities that may exist that will help the business grow. It separates the markets to which a company can be attracted. These factors that draw a company`s attention to a particular industry are listed below, and a company should carefully research and analyze these factors. It may also include business assets such as business units, subsidiaries and strategic alliances, as well as available product lines, patents, trademarks, and other valuable items that can be used to achieve positive financial results for the business.

Good management of the business portfolio will increase its performance and results by leveraging all its resources. b. Brands – Unilever`s business portfolio includes more than 400 brands, with 10 brands worth more than $1 billion Standardized portfolio models are particularly useful for analyzing relationships between business units and products. They don`t provide answers to questions like: When should a cash cow be dealt with with its money? When should you get rid of a dog? Which stars should be chosen for the investment and which should be less highlighted? At the same time, by offering simple strategies such as “harvesting”, standard models can limit management`s motivation to try alternative solutions such as repositioning products or opening up new national or international market segments. On the other hand, aggregation of product market segments can cause them to fall into a misleading “average” position in the portfolio, which in turn can lead to an inappropriate strategy designation. Consider the case of a manufacturer of shampoo, shaving cream, bath soap, toothpaste, and other personal care items (among others) for which a single strategic business unit (SBU) is responsible. The company has created a growth/equity matrix that qualifies this SBU as a cash cow. Now, this designation may clearly be inappropriate for every line in the product line and, moreover, for every item in the range. For example, aggregation can lead to incorrect positioning in the portfolio matrix as well as misallocation of resources and policy recommendations.

The reader will notice that the policy recommendation step is not present. Despite their appeal as a ready-made remedy for any disease, standardized guidelines such as “All-out Push for Share” and “Hold-Position” are very dangerous. If a recipe ignores the relevant dimensions or expected position of the company in other scenarios, it is quite misleading. Portfolio analysis can only be an effective way to analyze and evaluate strategic options if it uses the creativity and imagination of management – rather than sticking to a single recipe. Several corporate portfolio management software systems have been developed. They mainly focus on tracking and reporting on internal operations without supporting market and competitive intelligence. The planning process is often very complicated and closely linked, so different levels of corporate portfolio management are implemented. The analysis of a product portfolio requires seven main steps: It is a completely systematic and strategic regime. The following factors should be considered in order to plan a good portfolio.

The marketer must consider consumers` perceptions, preference and use of different products, their desire for diversity, their inventory (for example, hoarding if they expect an increase in prices), and the multipersonal nature of consumption in most households. Traditional approaches to portfolio analysis tend to ignore the consumer and focus on product performance.