The AHI is a hypothetical diversified firm operating in Australia.

Created less than 20 years ago, AHI has

clear goals of strong growth and achieving dominance in all the markets that it chooses to compete in.
the four SBU’s of AHI are as follows

1. A chain of fast food restaurants

2. A manufacturer of MP3 players
3. A ‘branding’ marketing consulting firm
4. A bus travel company

Categorizing the corporation’s business portfolio into the four boxes of BCG model

Star Problem child (?)

A ‘branding’ marketing consulting firm A chain of fast food restaurants

Cash cow Dog

A bus travel company A manufacturer of MP3 players

The major investment should have to be allocated to the problem child business that is fast food
business because this market is too big not to pursue it properly as it can generate potential huge
profits.

On the other hand the MP3 player business is far behind the market leaders and it is certain that
despite with investment this unit will end up in a weak position.

The consulting unit is star and it is generating its own revenues and cover its costs but we should
invest to sustain growth and maintain market share.

A bus travel unit has fair amount of share and it is a low growth market and we don’t have to invest
largely in cash cows.

1. Virgin is a portfolio manager corporate group where every SBU operate independently.

2. SBU’s are empowered to run their own affairs, yet the companies actively help one another, and
solutions to problems are often sourced from within the Group. The parent company add value
in terms of the global power of the Virgin brand; Richard Branson’s personal reputation contacts
and partners; the Virgin management style; the empowerment of staff; and of course a large
helping of Virgin flair all contribute to the success of our ventures.

3. For innovation, fun and a sense of competitive challenge.