Page 37 - Portfolio Analysis
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thinly, the company wil wind up with too many marginal divisions and
reduced capacity to finance promising new product entries or future
acquisitions.
?
High ?
Select Some Divest Rest
Business
Growth 10%
Rate Dispose
Milk
Low
10 x 1.5 x 1 x 0.1 x
High Cash Generation Low
Relative Market Share
COMPETITOR ANALYSIS
Product portfolios should be constructed for each of a company’s major
competitors. Management in these competitor companies are likely to be
undertaking a similar analysis of their product portfolio. Moreover, they
are likely to come to similar conclusions about the difficulty of funding all
their opportunities. The key question is which problem children to support
aggressively and which to eliminate. Each competitor will develop
different strategies for each of its businesses dependent upon its matrix
position, the needs and desires of the company and the relative potential
strengths of reaction by competitors.
