Strategic Management

Strategic analysis
and choice
CORPORATE
PORTFOLIO
ANALYSIS
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What is Corporate Portfolio Analysis?
It can be defined as a set of techniques that helps strategists in
taking strategic decisions with regard to individual products or
businesses in a firm’s portfolio.

In this, each segment of company or organization’s product line

is evaluated. This includes:

⦁ sales
⦁ production cost
⦁ market share
⦁ potential market share.
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Evolution Of Corporate Portfolio
Techniques
Evolved in Mid 1960

This technique was evolved somewhere between mid 1960s.

Importance Of Corporate Portfolio Analysis

⦁ To analyze the current business portfolio
⦁ To decide SBU investment distribution
⦁ To add new products or services or businesses
⦁ To decide product retention or removal

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Corporate Portfolio Analysis Techniques
Below is the list of various methods and techniques used for
Corporate Portfolio Analysis.

 BCG Matrix or Product Portfolio

 GE Nine cell model
 Hofer’s Product Market Evolution
 Directional Policy & the strategic position
 Action Evaluation matrix
 BCG Matrix Or Product Portfolio

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Corporate Portfolio Analysis Techniques
This model was proposed by Boston Consulting Group.

Two factors involved:

o Relative market share

o Market Growth Rate

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Corporate Portfolio Analysis Techniques
BCG matrix model involves four scenario:

o Star
o Cash Cow
o Dogs
o Question Mark: also called problem children

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Corporate Portfolio Analysis Techniques
GE Nine Cell Model

It is also called McKinsey Matrix or General Electric’s 9 Cell

Model.

This is a Strategic management tool similar to the BCG matrix.

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Corporate Portfolio Analysis Techniques
Two factors involved in nine cell GE model:

o Industry attractiveness
o Business Strength

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Corporate Portfolio Analysis Techniques
Three Segments in 9 cell matrix model

o Invest (Expand, Grow)

o Select (Earn, Hold)
o Harvest (Divest)

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