Strategic Management ? Business Portfolios and Growth Strategies
To do this, it must analyze and adjust its current business portfolio and develop growth and downsizing strategies for adjusting the future portfolio. The company might use a formal portfolio-planning method. But many companies are now designing more-customized portfolio-planning approaches that better suit their unique situations. Start studying Discuss how to design business portfolios and develop growth strategies. Learn vocabulary, terms, and more with flashcards, games, and other study tools.
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The main portfolils while developing a strategic plan, is the design of a how to download full xbox 360 games for free portfolio the collection of businesses and products that make up the company or the analysis of the current portfolio.
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Decide how much investment and support each SBU deserves. Growing your profits, revenue Developing your infrastructure Have a bold vision to achieve Maintain Loyalty We have helped develop and transform hundreds of companies across a spectrum of industries, filling a gap in the market between the big four consultancies and specialist individuals. Previous story.
Downsizing – A crucial component of Portfolio Planning
Discuss how to design business portfolios and developing growth strategies The from ECON at The University of Newcastle. Business Doctors offer ‘hands-on’ support to business owners helping them to overcome their individual challenges and supporting them to achieve business growth. The main priority while developing a strategic plan, is the design of a business portfolio the collection of businesses and products that make up the company or the analysis of the. Discuss how to design business portfolios and develop growth strategies. Step 3: Design Business Portfolio. a) develop current portfolios b) develop growth and downsizing strategies for future portfolios. Business Portfolio. the collection of businesses and products that make up the company.
Once the company has analysed its current business portfolio and determined which SBUs should receive more and which less investment, it must now shape its future portfolio. This is the second essential part of designing the business portfolio: Portfolio Planning. By using the Boston Growth-Share Matrix portfolio analysis approach, the firm has learnt how its current business portfolio looks like and which strategic business units should receive more and which others less attention.
But in an increasingly rapidly changing market environment, firms must be prepared for the future. Constant innovation is absolutely critical to survive in the market.
If the firm wants to compete more effectively and satisfy stakeholders, it needs growth, but even more important, profitable growth. Therefore, we now focus on the part of designing the business portfolio that involves finding products and businesses the company should consider in the future.
This is done by developing strategies for growth and downsizing. We call it Portfolio Planning. What do we need to do? We need to identify, evaluate, and select market opportunities as well as establish strategies for capturing those opportunities. This grid is a portfolio planning tool that identifies 4 strategies for future growth: market penetration, product development, market development and diversification.
On the vertical axis, existing markets and new markets are differentiated. On the horizontal axis, existing products and new products are differentiated. This leads to four fitting portfolio planning strategies for each situation. As said before, company growth is absolutely necessary for surviving in business. Yet, only developing strategies for growing their business portfolios is not sufficient.
Instead, the company must prepare and carry out strategies for downsizing as well. Downsizing is as necessary as growth for a sound portfolio planning.
Downsizing means nothing else then reducing the business portfolio. By eliminating products or SBUs. For example, the market environment might just change, leading to products or even whole markets that are not profitable for the company anymore. Or the firm might have entered too many international markets and now lacks experience and capabilities. Then, it may be better served by abandoning some SBUs and focus on the most promising ones, to concentrate the limited resources on the strongest products.
This does especially hold in difficult economic times. But products or business units might also simply age and die. Downsizing can be accomplished by pruning, harvesting, or divesting SBUs. The aim should always be to focus on growth opportunities, instead of wasting energy by trying to salvage fading ones.
With a balanced business portfolio, both now and in the future, the company can make sure that it will always be able to create superior customer value.
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