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Portfolio Analysis and Implementation

Portfolio Analysis and Implementation
What is Portfolio Analysis ? Portfolio Planning is best advised for diversified companies than the more product coherent ones. Portfolio analysis plays a vital role in planning and implementation of  various #strategic business units of the organization as a whole. Portfolio planning recognizes that diversified companies are a collection of businesses, each of which makes a distinct contribution to the overall corporate performance and which should be managed accordingly. Companies dealing with a wide #product range and divisions are expected to redefine their strategies for each of the SBU’s or Strategic Business Units. Then they classify these units on a portfolio grid according to the competitive position and attractiveness of a particular product market. What are strategic business units? A strategic business unit is a fully functional and discrete unit of the business that builds its own strategic vision and direction. Within large companies there are smaller specialized divisions that work towards specific projects and #objectives. The strategic business unit, often referred to as an SBU, remains an important element of the company and is accountable to their head office about their operational status. Typically they will operate as an independent organization with a specific focus on target markets and are large enough to maintain internal divisions such as finance, HR, and so forth. Types of Portfolio Planning: Analytical Planning: Planning is only at the initial level where traditional administrative tools are used. Process Planning: Here planning is a central part of the ongoing #management process and strategic mission is explicit in activities. Advantages of Portfolio Planning: It promotes substantial improvement in the quality of strategies formulated both at the business and corporate levels. It provides a guideline for adopting their overall management process to the needs of each business. It provides selective #resource allocation to the various SBUs. It furnishes companies with a greatly improved capacity for strategic control when portfolio planning is applied intelligently and with attention to its limitations and problems. Since the road to portfolio planning is a long one, companies often face difficulties trying to implement it and cannot realize the full potential of the approach. In implementing portfolio planning, there is a tendency for the focus to be shifted towards #capital investment rather than resource allocation. #Resource Development is the key: Implementing Corporate Level and Business Level Strategies: Corporate level #strategy is concerned with the strategic decisions a business makes that affect the entire organization. Financial performance, mergers and acquisitions, #human resource management and the allocation of resources are considered part of corporate level strategy. Business level strategy focuses on how to compete in a particular product/market segment or industry. Competitive advantages and distinctive competencies thus become dominant strategic concerns at this level. At the functional level, the primary focus of strategy is efficiency.  Boston Consulting Group Matrix: The business policy portfolio models are most popular and useful to understand the firm’s strategic concerns and choices. They define the firm’s scope or domain by highlighting the inter-relatedness of the diverse factors, such as: #Market Growth #Market Share Cash and Cash flow patterns Capital Intensity #Product Maturity #Stars – Star category represents high growth and high market share – High investments are needed to maintain the share – High cash flow outward movement in this category to maintain status – Usually in the end of the ‘Growth’ #Product Life Cycle stage – Represents emerging and good business for the company, though they need alot of attention and priority #Cash Cows – Represents low growth, high market share – This is the best quadrant of the portfolio as the company basically enjoy the ‘milk’ of success – This is where the revenue stream flows inwards...
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Strategies to Tide Over Competition

Strategies to Tide Over Competition
Strategies to Tide Over Competition Distinctive Competence: is nothing but a set of unique capabilities that certain firms possess allowing them to make inroads into preferred markets and to gain advantage over the competition. Human brain is the greatest think tank and it evolves new methodologies of business management from time to time in order to sustain as well as win the race. Planning is the key factor that decides the rise or downfall of a business empire. “Where we are?” and “Where we want to be in the next few years?” is how every business leader’s basic thought process must be, without which he cannot proceed further in the competitive corporate environment. If we call planning as the basement of a building, then it should be very precise, clear cut and robust so that the business empire built on this basement will never collapse and it will also serve as a role-model for everyone who aspires to set his foot in the corporate business world. At the corporate level, strategic planning helps to establish the Purpose Mission and Objective for the firm as a whole and “outlines the overall plan to attain them.” Strategy is nothing but a unique set of action plan that will distinguish you from your competitors and make you have an edge over them. Likewise strategic planning is nothing but thinking out of the box to” CREATE YOUR OWN NICHE MARKET” in the business environment. STRATEGIC COMPETENCE takes you to the top of the ladder; but to withhold your position you need to formulate innovative ideas to tide over the challenges in the market. Strategic planning facilitates this process by giving you time frame to complete your short term objectives and long term goals.   Infographic Courtesy: The 4 key sources to seek insights for marketing planning Planning for SBU’s: Business level planning is done for the enterprise’s STRATEGIC BUSINESS UNITS or SBU’S. These are individual” cash cows” that makes your business noteworthy and also brings in constant revenue to run your other units successfully even in periods of recession or if a particular product is not that successful as you might have expected it to be. I shall compare a business plan to a travel plan. Both involve planning, resources, capital, marketing and so on. . . Both have starting points but a business plan and its objectives never end and you can never come back to the starting point in a business as that of a travel, because you only expand and grow to greater heights in a business provided your plan is pucca. And also the strategy seeks the integration and control of marketing, finance, production and human resources at the functional level. Strategic Plans at different functional levels: Strategic plans at different levels must be integrated to ensure that they work in tandem and reinforce each other, thereby contributing to the corporate level strategy adopted for the entire corporate group. I would call strategic planning as” INTELLIGENCE DESIGN CHOICE ACTIVITY “adopted by a corporate and it has become an inevitable feature in the directory of the business world....
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