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    Corporate Portfolio Analysis

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    ASWATHY RAYIRATH
    Corporate portfolio analysis involves evaluating a company's portfolio of products and business units to determine the optimal allocation of resources. It aims to identify business opportunities, strategize for future growth, and direct resources toward areas with the highest potential. The analysis categorizes a company's products and looks at competition. It evaluates factors like sales, market share, costs, and market strength for each segment. The goal is to balance investments across units considering net cash flow, development stages, and risk to reduce vulnerability and increase strategic effects.

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    Corporate Portfolio Analysis

    Uploaded by

    ASWATHY RAYIRATH
    1K views13 pages
    Corporate portfolio analysis involves evaluating a company's portfolio of products and business units to determine the optimal allocation of resources. It aims to identify business opportunities, strategize for future growth, and direct resources toward areas with the highest potential. The analysis categorizes a company's products and looks at competition. It evaluates factors like sales, market share, costs, and market strength for each segment. The goal is to balance investments across units considering net cash flow, development stages, and risk to reduce vulnerability and increase strategic effects.

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    Corporate portfolio analysis

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    Corporate portfolio analysis involves evaluating a company's portfolio of products and business units to determine the optimal allocation of resources. It aims to identify business opportunities, strategize for future growth, and direct resources toward areas with the highest potential. The analysis categorizes a company's products and looks at competition. It evaluates factors like sales, market share, costs, and market strength for each segment. The goal is to balance investments across units considering net cash flow, development stages, and risk to reduce vulnerability and increase strategic effects.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    1K views13 pages

    Corporate Portfolio Analysis

    Uploaded by

    ASWATHY RAYIRATH
    Corporate portfolio analysis involves evaluating a company's portfolio of products and business units to determine the optimal allocation of resources. It aims to identify business opportunities, strategize for future growth, and direct resources toward areas with the highest potential. The analysis categorizes a company's products and looks at competition. It evaluates factors like sales, market share, costs, and market strength for each segment. The goal is to balance investments across units considering net cash flow, development stages, and risk to reduce vulnerability and increase strategic effects.

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    of 13

    Corporate portfolio analysis

    Introduction:
    Portfolio is a financial term denoting a collection of
    investments held by an investment company, hedge
    fund, financial institution or individual.

    Portfolio analysis describes an evaluative process or


    reviewing the holdings of an entire investment portfolio.
    Each asset must be evaluated for performance. Portfolio
    analysis also investigates the risk associated with the
    present portfolio composition. Mitigating risk is an
    indispensable component of portfolio management.
    Portfolio analysis
    “the strategic units that make up the company and the
    attempts to evaluate current effectiveness and
    vulnerabilities” (McDonald et al, 1992)

    -how much of our time and money should we


    spend on our best products to ensure that they
    continue to be successful?
    -how much of our time and money should we spend
    developing new costly products, most of which
    never be successful?
    Portfolio analysis is an analytical tool which views a
    corporation as a basket or portfolio of products or
    business units to be managed for the best possible
    returns.
    It involves identification and evaluation off all
    products or service groups offered by company on the
    market (so called product mix) and preparing
    specific strategies for every group according to its
    relative market share and actual or projected sales
    growth rate.
    A corporate portfolio analysis takes a close look at a
    company`s services and products.
    Each segment of a company's product line is evaluated
    including sales, market share , cost of production and
    potential market strength.
    The analysis categorizes the company's products and
    looks at the competition.
    The goal is to identify business opportunities,
    strategize for the future and direct business resources
    toward that growth potential.
    Portfolio analysis in strategic management allows to
    answer key questions on how to shape the present and
    future business portfolio (of products or services) in
    order to reduce the risk of functioning in a changing
    environment, and increase the effects of the
    implemented strategy.
    The aim of portfolio analysis is:-
    1) To analyze its current business portfolio and decide
    which businesses should receive more or less
    investment.
    2) To develop growth strategies, for adding new
    businesses to the portfolio.
    3) To decide which business should not longer be
    retained.
    Examples of portfolios

    Nestle: milk products and nutrition, beverages,


    prepared dishes and cooking aids, chocolates and
    confectionary, vending and food services
    Coca cola: soft drinks, minute maid, mineral water
    Amul: cheese, desert, health drinks
    Portfolio analysis involves the balancing of the
    company's investments in different products and
    business units with respect to the following aspects:-
    1) Net cash flow
    2) Statement of development
    3) risk
    Net cash flow
    A company may have different businesses behaving
    differently in terms of their cash flow. It has to balance
    different businesses so that there is an overall cash
    flow position in harmony with the desired financial
    strategy and condition of the company.
    State off development
    Businesses or products are likely to go through
    different life cycles such as embryonic development,
    growth, maturity, and decline. A company cannot
    depend on one product line alone. For a company to
    have stability, it is necessary to match the different
    businesses at different stages in their life cycles.
    Risk
    a corporate portfolio should aim at reducing the risk
    of financial setback. A solution maybe to diversify
    internationally because of the different market and
    economic forces, resulting in different cycles of
    development, growth and decline.
    Thank you!

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