What Are the Different Types of Business Analysis Resources?

The business portfolio is also known as the "business portfolio". A collection of different businesses operated by an enterprise with relatively clear boundaries. Selecting and determining business portfolios is one of the tasks of a company-level strategy. ^[1]

Business portfolio

Right!

The business portfolio is also known as the "business portfolio". A collection of different businesses operated by an enterprise with relatively clear boundaries. Selecting and determining business portfolios is one of the tasks of a company-level strategy. ^[1]

Chinese name

Business portfolio

Foreign name

Business Portfolio

Nature

Combination of strategic business units

Method

SwoT analysis

Research methods

SwoT analysis

SW0T analysis method is also called situation analysis method. We usually use it as the internal analysis method of the enterprise. That is, according to the established internal conditions of the enterprise to analyze, find out the advantages, disadvantages and core competitiveness of the enterprise. Among them, s stands for strength, w stands for weakness, O stands for opportunity, and T stands for threat, where S and w are internal elements and O and T are external factors. According to the complete concept of corporate competition strategy, strategy should be an organic combination between what an enterprise can do (that is, the strengths and weaknesses of the organization) and what it can do (that is, opportunities and threats to the environment).

Boston (BCG) Matrix

For a long time, people are used to using the market growth and market share matrix chart (Boston matrix chart) to solve the problem of business portfolio balance. This method distinguishes four business combinations: (1) Question Marks (high growth, low market share); (2) Stars (high growth, high market share); (3) Cash Cow business (cash cows, refers to low growth, high market share); (4) thin dog business (Dogs, refers to low growth, low market share). This tool analyzes business units through market share and market growth rate (market life cycle), and is a way to consider business portfolio balance and development. If a company does not have a cash cow business, it indicates that its current development lacks a source of cash; if it does not have a star business, it indicates that it lacks hope in its future development.

Using this tool, you can classify the Group's various businesses (except policy business). These four types of business cannot simply exclude who is good and who is bad. The key is to perform different analyses and formulate different types of business. Competitive strategy. Such as "thin dog" business. Generally considered the worst business portfolio, but it may still have value in fleshing out a product line or maintaining a reliable image for a company in a market. In addition, it is more important to maintain a balance between different business combinations, find the combination logic that fits the company's own situation, and reasonably allocate resources among different business combinations accordingly. If the company's goal is to achieve revenue growth, the corresponding allocation of resources may need to lean towards star business and problem business. If the company aims to pursue stable cash flow, it should maintain and develop the business of cash cows.

However, this method has many shortcomings. First, this method does not solve the problem of how to choose a new business. Second, the rating scale is too broad, which may cause two or more different businesses to be located in one quadrant. Second, due to the compromised rating scale, many businesses are located in the middle area of the matrix, and it is difficult to determine which strategy to use; In addition, it is difficult to balance the two or more businesses at the same time. The third is to assume that these businesses are independent, but many companies' businesses are closely linked. For example, if the Taurus business and the thin dog business are complementary business combinations, if the thin dog business is abandoned, the Taurus business will also be affected.

The fourth is to use relative market share as competitiveness, considering only sales growth rate and relative market share, but not other variables. Fifth, when calculating the current market share, it is assumed that the "market" can be accurately determined. This is not necessarily true, especially in some cases, because of changes in geography, products or consumer market segments, the boundaries of the market are in a state of constant change.

GE multi-factor combination matrix

In order to overcome the obvious shortcomings of the BCG matrix, GM developed the GE matrix (that is, the attractiveness / competitiveness matrix) in the 1970s, which is another business management method for planning and business portfolio. It uses a Jiugong map composed of industry market prospects and corporate competitiveness, according to the two aspects of the attractiveness of the relevant market in which the business unit operates and the Ik order, and the existence of the competitive advantage in this market. Unit for analysis. Among them, the market attractiveness factor is usually regarded as an exogenous variable, which cannot be controlled by the enterprise. The degree of market attractiveness mainly considers market size, market growth rate, periodicity, competition structure, barriers to entry, industry profitability, technology and other indicators; the competitiveness of the food industry can be considered as an endogenous variable and companies can control it. Competitiveness advantages mainly consider indicators such as market share, marketing, research and development, manufacturing, management capabilities, and financial resources. The GH matrix refines the three standard strategic countermeasures of market attractiveness into nine countermeasures, and then according to industry factors such as profitability, market growth rate, market quality, and regulatory situation, as well as market position, production capacity, Quantitative analysis of enterprise and lp strength factors such as research and development capabilities, and finally comprehensively determine their position in the matrix, and adopt countermeasures to resolve each phase.

For those business units that have great growth potential and competitive advantages, the company should continue to invest, and those business units that are least competitive or have no market attractiveness should retreat. For units in the middle position, it may be difficult to make advance or retreat decisions, but this tool can also help us identify the original prisoners formed by the positioning of these business units in the matrix, the future direction of the business, and work out their own Practical strategic measures.

But this matrix also has two major shortcomings: 'According to the idea of GE, companies in the same industry only have their own strengths, and there is no difference in the external environment. In fact, the external environment at the specific enterprise level and the entire industry level The external environment is different. The second is that although there are many internal and external choices, they are basically resource and environmental factors, and there is no self-connected internal capacity factor and characteristics of the industrial development stage that reflect the long-term trend of the future.

Matriarchal advantage theory

In the 1980s, TJPeters and RHwaterman Tishan enterprises should develop their business based on core business. Because this theory overcomes the problems caused by the complex management of Zhongshan in the portfolio plan, it is quickly accepted by the company. . In the 90's, cKPrahaland and G.IIamel improved the core business theory and proposed that companies should use core capabilities as the basis for creating value for enterprises to establish business portfolios and establish corresponding organizations. And management models. Many public journals strive to define their core capabilities, but due to the lack of analytical tools and the concept of core capabilities cannot explain those, the highly decentralized Ik service can also be the cause of successful enterprises. So the theory does not provide much practical guidance for developing company-level strategies. Later, the maternity advantage theory put forward by Michael G001d, Andrew campbell, Marcus Alexander, and others in 1995 filled the shortcomings of the concept of core competence and provided an effective strategy Planning tools.

The parental advantage theory is mainly to solve how to combine the strategic skills or core capabilities of the headquarters with the key success factors required for the business unit to obtain a competitive advantage. The foundation of this method is: the company should develop a business combination that is suitable for the parent company's parent-child advantage; in turn, the company headquarters should also develop a parent-child advantage that suits its business combination.

In this way, the company should be able to gradually increase the suitability in the following two aspects: (1) the fit between the key success factors of the business unit and the skills, resources, and characteristics of the company's headquarters; (2) the skills, resources, and characteristics of the company's headquarters. With the help of the headquarters, the business unit's suitability for opportunities to improve performance (business unit training opportunities).

After combining, the possible results are as follows:

(1) Core area businesses: those businesses whose headquarters can increase their value without damaging their value. They are the core of future strategies. The business in the core area has the opportunity to improve performance, and the company has a thorough understanding of the key success factors of its business. In the business portfolio, the company should give priority to the development of core area business.

(2) Core area edge business: This business matches the characteristics of some headquarters and does not match the characteristics of other headquarters. In other words, headquarters can add value or impair value. The combined impact is difficult to determine. Therefore, the company's decision-making layer needs to make accurate analysis and judgment, and make them as core business as possible.

(3) Ballast area business: Businesses that are clearly understood by the headquarters but cannot provide assistance. Although the key success factors are compatible, but there is no opportunity for parenting, so the possibility of further creating value for the ballast area business is relatively small. These Businesses can be more successful if they operate independently. The value-creation activities of the ballast area business have grown slowly, preventing managers from engaging in more innovative activities, and once the environment changes, there is a risk that this business will be transformed into a heterogeneous business. Managers should convert the business needs of the ballast area into core business or core business, or the company should abandon the business.

(4) Value trap business: The key success factors required for the value-added services and business units provided by the headquarters are not suitable, and the attention of the headquarters may bring more negative effects to the business units. This kind of business has the opportunity to improve performance. The temporary high return of the business is often that the decision maker cannot make a clear judgment, which will cause the company to fall into value dilemma in the future.

(5) Heterogeneous business: refers to businesses that are obviously unsuitable for storage. These businesses have no value-added opportunities, and their behavior is very different from that of the headquarters. These businesses should quit resolutely.

The theory of parental advantage is not only a simple analysis of the situation of the Ik service unit, but a connection between the business unit and the positioning of the group headquarters, and its strategic positioning of the headquarters level is mainly a role of a capacity cultivator. ^[2]