Strategic Portfolio

Analysis
Strategic Portfolio Analysis

It involves identification and evaluation of all products or service

groups offered by the company on the market (product mix) and preparing
specific strategies for every group according to its relative market
share and actual or projected sales growth rate.
 Portfolio analysis in strategic management also allows to
answer key questions how to shape the present and future
business portfolio (product or services) in order to reduce the risk
of functioning in a changing environment and increase the effects
of the implemented strategy.
Example:
To illustrate the process of strategic portfolio analysis,

• A customer service training program

• An Automated customer support
• A customer satisfaction survey
ABC COMPANY
 STEPS OF STRATEGIC PORTFOLIO
ANALYSIS
• DEFINE THE OBJECTIVES OF THE ANALYSIS
• GATHERING DATA
• ANALYZING THE DATA
• SELECTING THE OPTIMAL PROJECTS
In conclusion, strategic portfolio analysis is a tool
that can be used to evaluate various projects and
initiatives to determine which ones will be most
beneficial to the company. By using this tool,
companies can more effectively evaluate their
projects and initiatives to ensure that they are
selecting the ones that will be most beneficial to
the company and its strategic objectives.
ABC COMPANY
ADVANTAGES OF STRATEGIC
PORTFOLIO ANALYSIS

• IMPROVED DECISION MAKING

• BETTER RESOURCE ALLOCATION
• INCREASED EFFICIENCY.
 LIMITATIONS OF STRATEGIC
PORTFOLIO ANALYSIS

• DIFFICULTY IN DETERMINING THE TRUE

VALUE OF A PROJECT

• DIFFICULTY IN OBTAINING ACCURATE DATA

• SUBJECTIVITY OF THE ANALYSIS
Guess the PIC?
THE GROWTH
SHARE
MATRIX
Growth Share Matrix

The Boston Consulting Group (BCG) growth-share

matrix is a planning tool that uses graphical
representations of a company’s products and services in
an effort to help the company decide what it should keep,
sell, or invest more in.
The BCG GROWTH SHARE MATRIX was introduced by the
BOSTON CONSULTING GROUP in the year 1970s and with
Bruce Henderson. The matrix plots a company’s offerings in a
four-square matrix, with the y-axis representing the rate of
market growth and the x-axis representing market share.
 UNDERSTANDING THE BGC GROWTH-
SHARE MATRIX

DOGS STAR

QUESTION
CASH COWS MARK
DOGS (PETS)- Low Share, Low Growth

If a company’s product has a low market share and is at a

low rate of growth, it is considered a dog and should be
sold, liquidated, or repositioned. Because of this, dogs can
turn out to be cash traps, tying up company funds for long
periods of time. For this reason, they are prime candidates
for divestiture.
CASH COWS- Low Growth, High Share

Products that are in low-growth areas but for which the

company has a relatively large market share are
considered cash cows, and the company should thus milk
the cash cow for as long as it can. The value of cash
cows can be easily calculated since their cash flow
patterns are highly predictable.
STARS - High Growth, High Share

Products that are in high-growth markets and that make

up a sizable portion of that market are considered stars
and should be invested in more. This generate high
income but also consume large amounts of company cash.
QUESTION MARK -High Growth, Low Share

Questionable opportunities are those in high growth rate markets

but in which the company does not maintain a large market share.
They typically grow fast but consume large amounts of company
resources. Products in this quadrant should be analyzed frequently
and closely to see if they are worth maintaining.
HOW THEY USE THIS
MATRIX IN THEIR
BUSINESSES?
Guess the pic?
APPLE

• STAR: IPHONE
• CASH COW: MACBOOK
• QUESTION MARK: APPLE TV
• PET(DOG): iPAD
• The iPhone brought in $205.49 billion in sales for the year. In this case, it's
considered the company's star.
• One of the question marks for Apple is its Apple TV streaming service, which falls
under the Services category. In 2022, Apple's Services division earned $78.13
billion in sales.
• The cash cow for the company is its Mac products—notably the Macbook laptop,
which is one of the most popular in this group. Sales for Mac products came in at
$40.18 billion for the fiscal year (FY).
• Once a darling of the company, the iPad is now considered a dog. Apple's tablet
continues to show low growth, as sales continue to decline. Sales for the year came
in at $29.29 billion, compared to $31.86 billion in 2021.
One thing to note is that the matrix is a decision-making
tool. This means that it does not necessarily take into
account all the factors that a business ultimately must
face. By constructing a 2x2 table along the dimensions of
growth and market share, a company's businesses can be
categorized into one of four classifications: stars, pets,
cash cows, and question marks.
Thank you!