What Is a Business Portfolio?

WHAT IS A BUSINESS PORTFOLIO?

The business portfolio can be explained as the most crucial factors that are present in every organization plan and can be used for the effectiveness of any business. However, the business portfolio is used or focused as the Strategic Business Units (SBUs), and there could be better response towards the company mission, objectives, and strategy. Through the focus on the business portfolio, the company’s strengths as well as the weaknesses are identified, and the company may take better steps to improve in the market (Krühler).

It needs to be noted that the business portfolio involves the philosophy and competencies of the company in the market environment and the company could achieve success in the current portfolio through this helpful tool. With the help of the business portfolio, the current portfolio of the company is analyzed, and companies can effectively reach the point where the company is lacking and how the company could achieve success. Through a focus on the complete collection of the company products and businesses by business portfolio; the company could achieve success in the Strategic Business Units (SBUs) (Viguerie, Smit and Baghai).

Through the help of the business portfolio companies can become more successful as there could be a better focus on the industry trends and there could be better results through developing strategies that are required in the industry. Moreover, through business portfolio company, can earn more profit as the weaknesses could be identified in this way. However, in the business portfolio, there is the use of the Boston Matrix, and the company can get the success in the current business portfolio because there is the proper evaluation as well as the focus on the company growth and downsizing, through noticing the industry trends.

HOW DOES A COMPANY TYPICALLY CONDUCT A PORTFOLIO ANALYSIS?

The company can conduct a portfolio analysis evaluating the businesses through the following few steps. However, portfolio analysis is very important for the company and the company can be more profitable in this way. It needs to be noticed that the company increases and makes its products and businesses, according to the customer’s demands if there is the focus of the portfolio analysis through focus in the advantage of attractive opportunities. However, some steps need to be involved to effectively conduct the portfolio analysis in a company (Krühler).

• The first step is to identify the businesses’ make up; in this step, there is the need to focus on the management’s first step and the businesses’ make up in the company strategic business unit. Moreover, in the first step of the portfolio analysis the company can separate mission and objectives so that company division can be done effectively. In this step, the product line, as well as the achievements and attractiveness of company various SBUs, are highlighted (Viguerie, Smit and Baghai).
• The second step or next step is to focus on the calls for the management; as in the portfolio analysis, there is better strategic planning in this step, and there is the focus on the management that how staff can be helpful while planning. In the call for management, the companies support effective management through portfolio analysis.
• Moreover, the third or next step is to determine the business portfolio’s health; however, in this step the company focuses on the growth-share matrix so that the company’s healthy business portfolio can be developed according to the market. In addition, through determining the portfolio, the company can effectively identify the business units and then there could be a measurement of the health of the portfolio.
• Consequently, the last steps to maintain the portfolio analysis are the focus of the strategy and budget and to keep the company as well as the management update with portfolio analysis. To stay updated is most important for the company, as there could be better management of the company portfolio according to the industry and market in this way (Krühler).

Work Cited

Krühler, Matthias. Managing Business Portfolios Effectively: On the Explanatory Power of the Parenting Advantage Concept. Springer Science & Business Media, 2012.

Viguerie, Patrick, Sven Smit and Mehrdad Baghai. The Granularity of Growth: How to Identify the Sources of Growth and Drive Enduring Company Performance. John Wiley & Sons, 2011