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Unformatted text preview: Designing the Business Portfolio
• The business portfolio is the collection of businesses and products that make up the company.
• The company must:
– analyze its current business portfolio or Strategic Business Units (SBU’s)
– decide which SBU’s should receive more, less, or no investments
– develop growth strategies for growth or downsizing 2-9 Strategic Business Unit (SBU)
• A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses. • Can be a company division, a product line within a division, or sometimes a single product or brand. 2-10 Portfolio Analysis
• An evaluation of the products and business making up the company. • Resources are directed to more profitable businesses and weaker ones are phased down or dropped. 2-11 Analyzing Current SBU’s:
BCG GrowthShare Matrix Low High Market Growth Rate Relative Market Share High Low
Question Marks • High growth & share
• May need heavy investment to grow
• Eventually, growth will slow Cash Cows
Cash Cows Low growth, high share
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This note was uploaded on 01/28/2014 for the course BA 331 taught by Professor Kenbaker during the Fall '11 term at University of Tennessee.
- Fall '11