What Is a Business Portfolio Analysis?

Business portfolio analysis is the most important activity in strategic planning. The combination of business operations is closely related to the mission of the enterprise.

Business Portfolio Analysis

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Business portfolio analysis is the most important activity in strategic planning. The combination of business operations is closely related to the mission of the enterprise.

Business Portfolio Analysis Peter Drucker believes that a successful company must frequently ask itself the following five questions:

1. What does our company do?

2. Who is the customer?

3. What is the value to customers?

4. What will our business be?

5. What should our business be?

Based on the above five issues, analyze the current business portfolio:

1. For star products with high market growth rate and relative market share, product operation should be strengthened, cash consumption should be reduced, and considerable profits should be strived for.

2. For problematic products with a high market growth rate and relatively low market share, the company must make a decisive choice between a large amount of investment and timely exit, or it must make additional investments to quickly catch up with the needs of the growing market and enter the market. The star lineup; either exit in time and use the method of selling equity to recover the original investment as much as possible to avoid unnecessary risks eroding capital.

3. For Taurus products with low market growth rate and high relative market share, the company enjoys the advantages of economies of scale and higher profit margins. Therefore, the company must maintain its comparative advantage in a certain field or product. Or invest a lot of cash to update products, distribution combinations and promotional methods to maintain a high market share; or use mergers and acquisitions to increase market share and coverage, acquire or merge target companies, defeat competitors, or Seize commanding heights and pose a threat to competitors.

4. For dog products with a low market growth rate and relative market share, the management authority must adopt a contraction or elimination strategy.

Business portfolio analysis has laid a solid foundation for the development of corporate capabilities. Star products and Taurus products often represent