Portfolio Analysis and S.W.O.

T
Analysis

Tools for Strategic Marketing

Planning
PORTFOLIO ANALYSIS
 Most corporations have multiple product
lines and strategic business units.
 Challenge: How can you effectively
manage these various units?
 Answer: You must manage these diverse
units as a portfolio of SBUs
 Portfolio theory was first developed in
finance.

2
Strategic Business Units
 Strategic business units (SBUs) share
three characteristics:
 Single business or collection of
businesses which can be managed
separately
 Has own set of competitors
 Has manager responsible for strategic
planning and profits
Who Owns Which Portfolio?
 SoBe  Planet Java
 Frappuccino  KMX energy drink
 Lipton Iced Tea  Fruitopia
 Fruit Works juice  Nestea Iced Tea
 Aquafina water  Dasani water
 Dole juices  Powerade
 Gatorade  Odwalla
 Mad River Traders
The BCG Matrix
The Boston Consulting Group’s Growth-Share Matrix
The BCG Matrix
 SWOT Analysis
 “A widely used framework for organizing
and utilizing the pieces of data and
information gained from the situation
analysis…”
The SWOT Matrix
 The Elements of a SWOT
Analysis
 Strengths and Weaknesses (Internal)
 Scale and Cost Economies
 Size and Financial Resources
 Intellectual, Legal, and Reputational
Resources
 Opportunities and Threats (External)
 Trends in the Competitive Environment
 Trends in the Technological Environment
 Trends in the Sociocultural Environment
 SWOT-Driven Strategic Planning
 Four issues the marketing manager must
recognize:
 The assessment of strengths and weakness should look
beyond products and resources to examine processes that
meet customer needs. Offer solutions to customer problems
instead of specific products.
 Achieving goals and objectives depends on transforming
strengths into capabilities by matching them with opportunities.
 Weaknesses can be converted into strengths with strategic
investment. Threats can be converted into opportunities with
the right resources.
 Weaknesses that cannot be converted become limitations
which must be minimized if obvious or meaningful to
customers.
 Directives for a Productive
SWOT Analysis
 Stay Focused
 It is a mistake to complete one

generic SWOT analysis for the entire

organization or business unit.
 Search Extensively for Competitors
 Brand, Product, Generic, Total budget
competitors
 Directives for a Productive
SWOT Analysis
 Examine Issues from the Customers’
Perspective
 What do customers (and non-customers) believe about us
as a company?
 What do customers (and non-customers) think of our
product quality, customer service, price, overall value,
convenience, and promotional messages in comparison to
our competitors?
 What is the relative importance of these issues as
customers see them?
 Taking the customers’ perspective is the cornerstone
of a well done SWOT analysis.
 Directives for a Productive
SWOT Analysis
 Look for Causes, Not Characteristics
 Causes for each issue in a SWOT analysis
can often be found in the firm’s and
competitors’ resources.
 Major types of resources:
 Financial, intellectual, human, organizational,
informational, legal, relational, reputational, etc
 Directives for a Productive
SWOT Analysis
 Separate Internal Issues from External
Issues
 Failure to understand the difference between
internal and external issues is one of the major
reasons for a poorly conducted SWOT analysis.
 Socratic Advice:
 “Know thyself”
 “Know thy customer”
 “Know thy competitors”
 “Know thy environment”