9. Hold Strategy To enjoy continued strong cashflow. Relatively high market share / low market growth rate ‘Cash Cow’ opportunities should be able to maintain market share at or around existing levels
10. Build Strategy To grow the business. Relatively low relative market share / high market growth rate ‘Question Mark’ opportunities need investment in order to grow.
11. Harvest Strategy To develop short term cashflow irrespective of the long term damaging effect to the product or business. This strategy is appropriate for any weak products where disposal in the form of a sale is unavailable or not preferred due to high exit barriers
12. Divest Strategy To change the capital of the business and allow resources to be used elsewhere
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15. GE Business Screen Long-term industry attractiveness Business strength/competitive position
16. General Electric’s Business Screen Source: Adapted from Strategic Management in GE , Corporate Planning and Development, General Electric Corporation. Used by permission of General Electric Company. A Winners Winners B C Question Marks D F Average Businesses E Winners Losers G Losers H Losers Profit Producers Strong Average Weak Low Medium High Business Strength/Competitive Position Industry Attractiveness
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23. Portfolio Matrix for Plotting Products by Country Harvest/Divest Combine/License Invest/Grow Dominate/Divest Joint Venture Low High High Low Competitive Strengths Country Attractiveness Selective Strategies
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Editor's Notes
Many large corporations have more than one product, have many business units and operate in more than one location- this is what is termed a portfolio of businesses. If we look at the investment industry, many investors have a collection of investments called a portfolio. There are good reasons for this. Some of which we mention before. In terms of risk- spreading risk across a number of businesses or locations . Products may be at different stages of the product life cycle- inception, growth, maturity, decline and so on. This poses questions for the strategic manager – How to manage these firms in terms of cash, resources, marketing, In other words how does the manager manage this portfolio. To assist managers portfolio management using portfolio matrices was devised in the late 1960s and early 1970s, to encourage managers to view their individual business units as a series of investments. To address these units in terms of resource allocation. The idea behind portfolio management is to, as McNamee suggests “ to enable strategic planners to seek the optimal strategy for the individual products whilst achieving overall corporate objectives”
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