美世 - Business Portfolio Analysis.ppt

Business Portfolio Analysis Outline Introduction BCG (Boston Consulting Group) Matrix PIMS (Profit Impact of Market Strategy) GE(General Electric)/McKinsey Multi-Factor Matrix Introduction The creation of SBUs enables the setting of SBU’s mission and objectives and the allocation of resources across SBUs in the organization Senior management need to have a framework to evaluate SBUs and to assign limited resources among them; hence portfolio analysis Many models but only 3 are covered here: BCG, PIMS, GE models BCG (Boston Consulting Group) Matrix Provides a framework for senior management in allocating resources across business units in a diversified firm by Balancing cash flows among business units, and Balancing stages in the product life-cycle (PLC) BCG Product Portfolio Matrix Dimensions BCG Matrix (cont’d) The horizontal axis is the Relative Market Share shown in a log scale Vertical line is usually set as 1.0 Relative Market Share An SBU to the left of this line means it is the market leader in the industry or segment in which it operates Conversely, an SBU to the right of this line (1.o RMS) means it is not the leader BCG Matrix (cont’d) The vertical axis is the growth rate 5 levels may be used: product, product lines, market segment, SBU and business growth rate Horizontal line is usually set as 10% Growth Rate SBUs above the set value (10% line) represents high growth rates Conversely, SBUs below this value depicts slower growth rate Matrix Quadrants Key Assumptions of BCG Matrix Stable cost/price relationship Not valid if the firm is pricing on projected lower average unit costs in the future Market leader influences the average costs Profit margin is a function of market share This ignores profitable niches Strategic Perspectives of Products in Different Quadrants Four different strategic perspectives Investment Earnings Cash-flow, and Strategy Implications Question Marks (Problem Children) Investment—heavy initial capacity expenditures and high RD