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portfolio analysis
More diversified companies are more usefully considered as being composed of a portfolio of strategic business units (SBUs). Portfolio analysis is used to assess needs and to allocate resources in recognition of differences in the contributions of different SBUs to the achievement of corporate objectives for growth and profitability. Portfolio analyses are often performed using models that classify SBUs and product-markets within a two dimensional matrix in which one dimension represents the attractiveness of the market and the other dimension the strength of competitive position. The position of the SBU within the matrix has direct implications for the generic investment strategy of the business-that is, whether it is appropriate to have an investment strategy/build strategy, hold strategy, harvesting strategy, or divest strategy. Some of the best known models for portfolio analysis include the Boston Consulting Group's growth-share matrix and General Electric's market attractiveness-competitive position matrix.
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