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Methods of strategic development

Portfolio analysis

3.1 Portfolio analysis

This determines the fit between a SBU and the overall organisation as well
as the fit for the SBU with other SBUs in the organisation’s portfolio of
SBUs. Criteria are applied to categorise SBUs.

3.2 Main uses

 Assessing performance and position of SBUs in the portfolio

 Determining strategies for SBUs

 Suggesting SBUs for disposal

 Assessing potential SBUs for acquisition.

There are two ways to do this.

Each model can typically answer all of the questions above. It is therefore normal to
only use one of the models in an exam answer.

This is an element of analysis and therefore the techniques used in strategic analysis
should be employed here (e.g. remember to include numbers and to justify issues
rather than simply state them).

For public sector organisations.

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