home › Acquisition of apartments › Portfolio analysis. Theoretical foundations of portfolio analysis

Portfolio analysis. Theoretical foundations of portfolio analysis

Send your good work in the knowledge base is simple. Use the form below

Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.

Similar Documents

Characteristic production activities and organizational structure enterprise management. Analysis of its main economic indicators and financial condition. Identification of advantages and disadvantages, opportunities and threats using SWOT analysis.

term paper, added 02/11/2014

Economic content of portfolio investment in the modern financial market. Basic principles of formation of a portfolio of securities. Ways to solve the problem of inefficiency of modern Russian financial market within portfolio analysis.

Meaning, essence, goals and objectives of the analysis of the financial condition of the enterprise. Structure of the methodology financial analysis. Elimination of defects financial activities, finding reserves to improve the financial condition of the enterprise and solvency.

term paper, added 10/26/2014

Types of financial analysis, classification of its methods and techniques. Methods for diagnosing the probability of bankruptcy and ways of financial recovery. Methods of analysis and assessment of the financial condition of the enterprise, measures to optimize the financial condition.

term paper, added 09/12/2013

Study, evaluation and diagnostics of the financial condition of the enterprise in order to improve the efficiency of activities. Analysis of the sources of capital formation, assessment of the property status of the enterprise. Solvency analysis based on liquidity analysis.

term paper, added 02/06/2009

Analysis of the main objectives of the financial analysis of the enterprise. Financial analysis functions: Objective assessment financial condition, mobilization of reserves to improve the financial condition. Characteristics and essence of factor analysis of profitability indicators.

term paper, added 05/14/2012

The financial condition of the organization, the factors that determine it, the methodology for conducting the analysis. Brief economic description of the economic and financial activities of LLC "AVIS". Strategy and main directions for improving the financial condition of the organization.

thesis, added 10/29/2012

Modern economic activity is a set of many processes that need a clear management system.

This function is largely performed by strategic planning, which ensures the unity of the direction of efforts to achieve common goals. Without planning, the economic system is invariable in time and cannot adapt either to changes in the external environment or influence the processes occurring within it. Therefore, no management is possible without planning the activities of the enterprise, since the effective functioning largely depends on it.

In an organization, strategies are planned and implemented simultaneously or sequentially at multiple levels. In this paper, the author considered the portfolio level.

The portfolio level strategy defines the organization as a whole, the behavior of its divisions or business units, the combination of which allows you to perceive the company as a whole. The portfolio level of management is carried out by top management (chief manager, CEO, the president of a corporation and more), the board of directors and other senior staff. These executives determine the purpose, mission and goals of the corporation, identify key areas of activity, allocate resources, and formulate strategies.

At each level of planning, certain matrices are used that can identify problems at this level and indicate ways to solve them. At the portfolio level, with the help of matrices, the businesses included in the corporation are analyzed, they help to carry out portfolio analysis, as well as an analysis of the situation in the corporation as a whole.

The corporate level includes such matrices as:

Matrix BCG - Boston Consulting Group (growth rate / market share);

SWOT Analysis Matrix;

Shell/DPM Matrix (Directed Policy Matrix);

Matrix 20-80 (Lorenz curve);

Ansoff matrix;

ADP / LC matrix (matrix of industry life cycle stages, relative to market position);

Porter matrix;

Thompson and Strickland matrix;

Matrix MCC (matrix of conformity of the purposes - possibilities of the enterprise).

1. Matrix BCG - Boston Consulting Group (growth rate or market share. The BCG matrix is a kind of display of positions specific type business in a strategic space defined by two coordinate axes, one of which is used to measure the market growth rate of the relevant product, and the other is used to measure the relative share of the organization's products in the market of the product in question.

The BCG model is a 2x2 matrix in which business areas are depicted as circles centered at the intersection of coordinates formed by the corresponding market growth rates and the relative share of the organization in the corresponding market. Each circle plotted on the matrix characterizes only one business area characteristic of the organization under study. The size of the circle is proportional to the total size of the entire market (in other words, it takes into account not only the size of the business of this particular organization, but in general its size as an industry on the scale of the entire economy. Most often, this size is determined by simply adding the business of the organization and the corresponding business of its competitors). Sometimes on each circle (business area) a segment is allocated that characterizes the relative share of the organization's business area in a given market, although this is not necessary to obtain strategic conclusions in this model. Market size, like business areas, is most often measured in terms of sales volumes, and sometimes in terms of asset values.

Each of the quadrants in the BCG model is given figurative names:

"Stars". These tend to be new business areas that account for a relatively large share of a rapidly growing market, operations in which bring high profits.

"Cash Cows". These are business areas that have received a relatively large market share in the past.

"Difficult Children" These business areas compete in growing industries, but occupy a relatively small market share.

"Dogs". These are business areas with relatively small market share in slow growing industries.

2. Matrix "attractiveness - competitiveness" or "General Electric - McKinsey". The matrix "attractiveness of the industry competitiveness of the unit" allows you to determine the investment priorities of a diversified company. The highest investment priority is given to subdivisions in the three cells of the upper left corner of the matrix, i.e. highly competitive and in the most attractive industries. The strategy of these divisions should be focused on growth and expansion; a significant part of the investment funds is transferred to them. Medium investment priority is given to units that occupy three spaces diagonally from left to right and from bottom to top. Investments in such divisions are carried out selectively, depending on specific conditions: the scale of activities, profitability, strategic and resource compliance, the overall strategy of the company, and so on.

Companies with an average investment priority have different attractiveness.

Rice. one.

The matrix "General Electric - McKinsey" has a dimension of 3x3. The axes show integral assessments of the attractiveness of the market and the relative advantage of the company in this market or the strengths of the company's business. Along the X axis in the matrix "General Electric - McKinsey" there are parameters that are controlled by the company, respectively, along the Y axis - uncontrolled. Increasing the dimension of the matrix to 3x3 made it possible not only to give a more detailed classification of the compared types of business, but also to consider wider opportunities for strategic choice.

The matrix identifies three areas of strategic positions:

Winner area. All types of businesses that fall into the area of winners have the best or average values of market attractiveness factors and company advantages in the market compared to the rest.

Loser area. These are the types of businesses that have at least one of the lowest and do not have any of the highest parameters plotted along the axes.

Middle region or border. These are types of businesses that, under certain conditions, can either grow and turn into "winners", or shrink - become "losers".

The main disadvantages of portfolio analysis methods using the General Electric - McKinsey matrix are as follows:

Difficulties in taking into account market relations (boundaries and scale of the market), too a large number of criteria. As the number of factors grows, their measurement becomes more difficult;

Subjectivity of position evaluations;

The static nature of the model;

3. SWOT analysis matrix. The matrix was voiced in 1963 by Professor Andrew at Harvard, its abbreviation stands for "Strength - Weakness - Opportunities - Threats." With the advent of the SWOT model, the tool strategic planning for intellectual work. Known, but scattered and unsystematic ideas about the company and the competitive environment, SWOT analysis made it possible to formulate in the form of a logically consistent scheme of the interaction of strengths, weaknesses, opportunities and threats.

As a rule, SWOT analysis is an analysis of the strengths and weaknesses of the organization, opportunities and threats emanating from environment, is carried out using auxiliary tables (matrices).

The strengths are internal factors that are most likely to contribute effective work firms.

Strengths are possible because they can be used as a basis for strategy formation and competitive advantage.

Weaknesses are internal factors that are most likely to hamper the organization's performance.

Weakness is the absence of something important for the functioning of the firm, or something that fails (in comparison with another), or something that puts it in unfavorable conditions.

Opportunities are external factors that favor an organization.

Threats are external factors that are most likely to cause adverse conditions for the operation of the organization. Threats can come from: the emergence of cheaper technologies; new rules that hurt the firm more than others; vulnerability to an increase in interest rates; and much more.

4. Shell Matrix or DPM (Directed Policy Matrix). The directional policy matrix model was proposed in 1975 in the context of the energy crisis that was taking place at the time.

According to the matrix model, the market is an oligopoly. Therefore, for organizations with weak competitive positions, an immediate or gradual exit strategy is recommended. Also, the attractiveness of the industry implies the existence of a long-term development potential for all market participants.

The model is a two-dimensional table. Strategic decisions depend on what is the focus of management: the life cycle of a type of business or the company's cash flow.

5. Matrix 20-80 (Lorenz curve). The Lorentz curve is a graphic representation of a distribution function. It was proposed by the American economist Max Otto Lorenz in 1905 as an indicator of income inequality.

In this representation, it is an image of the distribution function, which displays the shares of the population and income of the population. In a rectangular coordinate system, the Lorentz curve is convex downward and passes under the diagonal of the unit square located in the I coordinate quarter.

Each point on the Lorentz curve corresponds to a statement. In the case of an equal distribution, each group of the population has an income proportional to its size.

Such a case is described by an equality curve, which is a straight line connecting the origin and the point (1;1). In the case of complete inequality (when only one member of society has an income), the curve first "sticks" to the x-axis, and then rises from the point (1; 0) to the point (1; 1). The Lorenz curve is enclosed between the curves of equality and inequality.

Lorenz curves are used to distribute not only income, but also household property, market shares for firms in an industry, and natural resources across states.

6. ADP or LC matrix (matrix of industry life cycle stages, relative to market position). The Arthur D. Little Matrix was developed by Arthur D. Little, a well-known management consulting company.

This model is based on two variables reflecting sector maturity (industry life cycle) and position relative to competitors. Expert assessments showing the maturity of the sector and the position in relation to competitors determine the direction of the enterprise, its forms economic activity. This is what is the basis of the product policy of the enterprise.

The concept of the life cycle itself is an integral part of strategic planning. There are two types of life cycles in the literature:

Demand life cycle;

Technology life cycle.

The life cycle concept is based on the existence of several phases for all technologies and products in the process of their presence on the market.

Origin - a turbulent period of the formation of the industry, when several companies, striving to seize leadership, compete with each other;

Growth acceleration is the period when competitors who remain in the market reap the benefits of their victory. During this period, demand usually rises, outpacing supply;

Growth slowdown - the period when the first signs of saturation of demand appear and supply begins to outpace demand;

Maturity - the period of time in which saturation of demand has been achieved and there are significant excess capacities;

Attenuation - a decrease in the volume of demand (sometimes to zero), predetermined by long-term demographic and economic conditions(such as the growth rate of gross national product or population) and the rate at which a product becomes obsolete or less consumed.

The universality of this model is confirmed by the fact that a single type of business of any corporation can be at one of the stages of the life cycle described above, and, therefore, it must be analyzed in accordance with this stage.

7. Ansoff and Porter matrices. Another well-known tool for strategic analysis is the I. Ansoff matrix, with which you can explore the general outlines of strategies for certain development trends of a company or individual strategic business areas, as well as a range of problems associated with the development of a company.

If the company is going to borrow new market without changing the product, then a go-to-market strategy should be implemented. If a company wants to learn how New Product, and a new market, then you should adhere to a diversification strategy. And so on in accordance with Table 1 depicting the Ansoff matrix.

Table 1 Ansoff matrix



	Market penetration	Product Development
	Market Development	Diversification

For a more specific analysis of possible strategies for the company as a whole or in separate strategic areas of management, the M. Porter matrix, shown in Table 2, is often used.

To develop an entire market sector, it is advisable to apply either a differentiation strategy or a cost leadership strategy, depending on how the company is going to expand market share (or on what type of competition prevails in this sector) - price methods (low costs compared to with competitors) or non-price (highlighting the originality of the product from the point of view of consumers).

Table 2 Porter Matrix

After analyzing the strategic portfolio using one or more of the above matrices, it is useful to evaluate the flexibility of the strategic portfolio. The flexibility of a strategic portfolio is understood as the ability of the latter to function stably under certain changes in the external environment.

Enterprise portfolio- a set of relatively independent business units (strategic business units) owned by one owner.

portfolio analysis- a tool with which the company's management examines and evaluates its economic activity in order to invest in the most profitable or promising areas and reduce / terminate investments in inefficient projects.

At the same time, the relative attractiveness of the markets and the competitiveness of the enterprise in each of these markets are assessed. The company's portfolio is supposed to be balanced, i.e., it should be the right combination of units or products that need capital for growth, with business units that have some excess capital.

The purpose of portfolio analysis techniques is to help managers create a clear picture of how costs and benefits are generated in a diversified company. Portfolio analysis provides managers with a tool to analyze and plan portfolio strategies to determine prudent diversification in a diversified firm.

One of the most important ways to use the results of portfolio analysis is to make decisions about the restructuring of the company in order to use the opportunities that are opening up both inside the company and outside it.

Methods of portfolio analysis of the enterprise's activities were developed in the 1960s to solve the problems of strategic management at the corporate level and are one of the few specialized methods of strategic management. The theoretical basis of portfolio analysis is the concept of the product life cycle and the experience curve. At the same time, portfolio analysis recommends that, for the purposes of developing a strategy, each product of the company, its business units be considered independently, which allows them to be compared with each other and with competitors.

The main method of portfolio analysis is construction of two-dimensional matrices, with the help of which business units or products can be compared with each other according to such criteria as sales growth rates, relative competitive position, life cycle stage, market share, industry attractiveness, etc. based on the analysis of the external environment), analysis of the activities of the enterprise and comparison. It should be noted that although different sets of variables are used in different matrices, they are still two-dimensional matrices, in which an assessment of the market development prospects is determined on one axis, and an assessment of the competitiveness of the business units of an enterprise is determined on the other.

Portfolio analysis is designed to solve the following problems:

Coordination of business strategies, or strategies of business units of the enterprise. It is designed to strike a balance between business units with quick returns and directions that prepare the future;

Distribution of personnel and financial resources between business units;

Portfolio balance analysis;

Establishment of executive tasks;

Carrying out restructuring of the enterprise (merger, acquisition, liquidation and other actions to change the management structure of the enterprise, expand or reduce the business).

The main advantages of portfolio analysis are the possibility of logical structuring and visual reflection of the strategic problems of the organization, the relative simplicity of presenting the results, the emphasis on the qualitative aspects of the analysis.

Typically, the process of portfolio analysis follows the same pattern.

1. All activities of the enterprise (product range) are broken down into strategic business units. The task of identifying or isolating business units is quite difficult, especially for large corporations. It is believed that the business unit should:

Serve the market independently, and not work for other divisions of the enterprise;

Have your customers and competitors;

The management of the business unit must control key factors that determine success in the market.

Guided by these criteria, the management of the enterprise is called upon to decide what a business unit is: a separate firm, a division of an enterprise, a product line, or a separate product? The answer depends on the current management structure at the enterprise. For example, in organizations with functional structure management, the business unit is the product range, while in a divisional structure, the business unit is the main unit of analysis.

2. The relative competitiveness of these business units and the prospects for the development of the respective markets are determined. At the same time, different consulting firms offer different criteria for assessing the prospects for the development of the market and the activities of business units in these markets.

3. A strategy is developed for each business unit (business strategy), and business units with similar strategies are combined into homogeneous groups.

4. Management evaluates the business strategies of all divisions of the enterprise in terms of their compliance with corporate strategy, commensurate with the profit and resources required by each division. Based on such a comparative analysis, it is possible to make decisions on adjusting business strategies. This is the most difficult stage of strategic management, where the influence of the subjective experience of managers, their ability to predict and anticipate the development of events in the external environment, a kind of "intuition for the market" and other informal moments is great.

When carrying out portfolio analysis, it should be remembered that this is only a tool that works well in experienced hands. The apparent simplicity of constructing portfolio matrices is deceptive, since they require complete and reliable information about the state of the market, its segmentation, the strengths and weaknesses of the enterprise and its main competitors.

The main disadvantage of portfolio analysis is to use data about the current state of the business, which cannot always be extrapolated into the future. It should also be remembered that in any portfolio matrix, different types of businesses are evaluated according to only two criteria, while many other factors (product quality, investments, etc.) are left without attention.

The differences in portfolio analysis methods are in approaches to assessing the competitive positions of strategic business units and the attractiveness of the market. The best known approaches are those proposed by the Boston Consulting Group (BCG Portfolio Matrix) and the McKincey consulting firm (Business Screen).

The matrix proposed by the Boston Consulting Group is based on a product life cycle model, according to which a product or business unit goes through four stages in its development: market entry (product - "problem"), growth (product - "star") , maturity (product - "cash cow") and decline (product - "dog"). At the same time, the cash flows and profits of the enterprise also change: negative profit is replaced by its growth and then a gradual decrease.

Product-"problem" is a new product in a growing industry. Such products may turn out to be very promising, but they need significant financial support from the center. The main strategic question, which presents a certain difficulty, is when to stop financing these products and exclude them from the corporate portfolio? If this is done too early, then you can lose a potential star product. However, in the process of becoming these products are associated with large negative financial flows, and there is a danger that they will not be able to develop into "star" products. The risk of financial investments in this group is the greatest.

Product-"star"- This product is a market leader at the peak of its product cycle. It itself brings a fairly high profit, but at the same time it requires significant financial costs in order to maintain or expand its share of a dynamically developing market. Therefore, despite the strategically attractive position of this product, its net cash income is quite low.

There is a temptation for managers to reduce investment in order to increase current profits, but this can be short-sighted, as in the long run this product can turn into a cash cow product. In this sense, the future revenues of the star product are important, not the current ones. When the growth rate of the market slows down, star products become cash cows.

Goods - "cash cow" is a product that occupies a leading position in the market with a low growth rate. Its appeal lies in the fact that it does not require a large investment and provides significant positive cash flows based on the experience curve. Such products not only pay for themselves, but also provide funds for investing in new projects on which the future growth of the enterprise depends.

In order for the phenomenon of "cash cow" goods to be fully used in the investment policy of an enterprise, competent product management is necessary, especially in the field of marketing. Competition in stagnant industries is very tough. Therefore, constant efforts are needed to maintain market share and search for new market niches.

Product-"dog" is a product that has a low market share and no growth opportunities because it is in unattractive industries (in particular, an industry may be unattractive due to a high level of competition). Net cash flows for such products are zero or negative. Unless there are special circumstances (for example, a given product is complementary to a cash cow or star product), then these products should be discarded.

The essence of the Boston Matrix is that it focuses on the positive and negative cash flows that are associated with the various products of an enterprise or its business units.

During the analysis of the range of manufactured products, the position of each type of product in the matrix is determined. To do this, the company's products are classified in terms of relative market share and industry market growth rates.

Relative market share indicator (RSH) is defined as the market share of the business unit divided by the market share of the largest competitor. It is clear that this indicator for the market leader will be more than one. For example, a relative market share of two means that the market leader has twice the market share of the nearest competitor. On the other hand, if the relative market share is less than one, then this indicates a lag behind the market leader. A high market share is seen as an indicator of a business that generates positive cash flows, as an indication of the expected revenue stream. This position is based on an experienced curve.

The second variable is industry market growth rate (TRP)- based on industry sales forecasts and linked to industry life cycle analysis. Of course, the actual life cycle curve of an industry can only be drawn retrospectively. However, the management of the enterprise can expertly assess the stage of the life cycle of the industry in which it operates in order to determine (predict) the need for finance. In high-growth industries, significant investment in research and development of new products and advertising is needed to try to achieve market dominance and consequently positive cash flows.

To build the BCG matrix, the values of the relative market share should be fixed along the horizontal axis, and the market growth rates along the vertical axis. Further, dividing this plane into four parts, we obtain the desired matrix (Fig. 8.1). The value of the ODR variable, equal to one, separates products - market leaders - from followers.

Rice. 8.1. Boston Consulting Group Matrix

With regard to the second variable, industry growth rates of 10% or more are generally regarded as high. It can be recommended to use as a baseline separating markets with high and low growth rates, the growth rate of the gross national product in physical terms, or the weighted average of the growth rates of various segments of the industry market in which the company operates. It is believed that each of the quadrants of the matrix describes significantly different situations that require a different approach in terms of financing and marketing.

The BCG matrix is based on two hypotheses:

The first hypothesis is based on the experience effect and assumes that a significant market share means the presence of a competitive advantage associated with the level of production costs. From this hypothesis it follows that the largest competitor has the highest profitability when selling at market prices and for him the financial flows are maximum.

The second hypothesis is based on a product life cycle model and assumes that presence in a growing market means an increased need for financial resources for updating and expanding production, conducting intensive advertising, etc.
If the market growth rate is low (mature or stagnating market), then the product does not need significant financing.

In the case when both hypotheses are fulfilled (and this is not always the case), four groups of markets can be distinguished with different strategic goals and financial needs.

Each business unit of an enterprise or its product falls into one of the quadrants of the matrix in accordance with the growth rate of the industry in which the enterprise operates and relative market share. In this method, it is important clearly define the industry in which the firm operates. If the industry is defined too narrowly, then the firm may become a leader; if the industry is broadly defined, the firm will appear weak.

Graphically product positions, or business units, usually displayed in a circle the area of which reflects the relative importance of this structure or product for the enterprise, estimated by the value of the assets used or the profit generated. Such an analysis is recommended to be carried out in dynamics, tracing the development of each business over time.

The BCG analysis method comprehensively considers a set of products manufactured by an enterprise, evaluates the significance of each of them and offers recommendations for redistribution financial flows between products.

The desired sequence of product development is as follows (see Figure 8.1):

"Problem"® "Star"® "Cash cow" (and if inevitable)® "Dog".

The implementation of such a sequence depends on efforts aimed at achieving a balanced portfolio, which involves, among other things, a decisive rejection of unpromising products.

Ideally balanced product portfolio the enterprise should include: 2-3 "cow" products, 1-2 "stars", a few "problems" as a reserve for the future, and perhaps a small number of "dog" products. Typical unbalanced portfolio has, as a rule, one “cow” product, many “dogs”, several “problems”, but does not have “star” products capable of taking the place of “cows”. An excess of aging goods (“dogs”) indicates the danger of a downturn, even if the current performance of the enterprise is relatively good. An excess of new products can lead to financial hardship.

View strategic business unit		Cash	Possible Strategies
"Problem"	Low, growing, unstable	Negative	Analysis: can the business rise to the level of "star"?
"Star"	High, stable, growing	Approximately zero	Investment for growth
"Milch cow"	high, stable	positive, stable	Maintaining the profitability of investments in other divisions
"Dog"	low, unstable	Approximately zero	Unit liquidation / "harvesting"

Portfolio analysis carried out using the BCG matrix allows us to draw the following conclusions:

Determine a possible strategy for business units or products;

Assess their funding needs and profitability potential;

Assess the balance of the corporate portfolio.

The main shortcomings of the Boston Consulting Group approach are the following:

The matrix provides only two dimensions - market growth and relative market share, other growth factors are not considered;

The position of a strategic business unit depends significantly on the definition of the boundaries and scope of the market;

In practice, it is not always clear how market share growth affects
on business profitability. The hypothesis of the relationship between relative market share and profitability potential is applicable only in the presence of an experimental curve, i.e., mainly in mass production industries;

The interdependence of economic units is ignored;

A certain cyclical development of commodity
markets;

Practical studies have shown that a well-balanced portfolio does not guarantee high returns.

Boston Consulting Group modified my matrix using two criteria:

Dimensions of competitive advantages that determine the structure of competition in the industry (fragmentary or concentrated competition);

The number of ways to realize competitive advantage, which is equal to the number of strategic approaches used in the industry.

Dimensions of competitive advantages determined by the possibility of using the effect obtained from them, and number of ways to realize competitive advantages determines the effect of product differentiation: the effect is stronger, the more ways to realize competitive advantages.

In the modified BCG matrix, all activities are divided into four types. Each type has its own strategy, which is determined by the relationship between the rate of return on investment and the market share of the product.

Volume (concentrated activity). The enterprise has several potentially important sources of competitive advantages, but product differentiation is not sufficiently stable and cost-effective.

For such industries, the strategy of cost reduction and market dominance (production concentration) is justified. For them, there is a strong positive relationship between market share and profitability (these are supermarkets, food production, standard microprocessors). The experience curve will directly affect the competition of firms in such industries. Another possible strategic choice of enterprises in this group is the course towards specialization, i.e., the transition to another group.

Pat (unpromising competitive activity). The enterprise has several ways of competition, but they do not provide significant competitive advantages, i.e., neither the effect of production scale (experimental curve) nor the effect of product differentiation can be applied. All producers (regardless of their size) are content with low profitability. Price is a key feature for buyers. Under these conditions, it is important to exercise strict control over costs and to look for external sources of financing. The entire industry may be in a difficult position (for example, ferrous metallurgy, coal industry), the only way out of which can be a change in the nature of the activity. For example, ferrous metallurgy seeks to move to specialized industries using new technologies.

Fragmentation. This category includes those activities for which there is no one-to-one relationship between market share and profitability (for example, restaurant services, clothing production, jewelry trading). They can have many sources of competitive advantage (location, product quality, service level, etc.).

Fragmentation is inherent in two types of activity:

Industries that are just starting to develop, where the market exists only potentially and needs to be created (biotechnology, the use of the superconductivity effect);

Industries operating “on order” (engineering, consulting, construction), as well as those of a “handicraft” nature (restoration work).

There are fragmented industries in almost every economy. These are the service sector, trade and marketing, agricultural production, as well as such specific activities as the production of television programs.

In fragmented industries, where many small and medium-sized companies compete for relatively small market shares, the focus strategy is likely to dominate.

Specialization. Two effects are fully manifested here: the scale of production and differentiation of products. Firms try to use economies of scale at all stages of the production cycle, while achieving, if possible, greater product differentiation in its final stages (design, accessories, packaging, etc.). This situation is typical for the automotive industry: the maximum standardization of the various components of the car (motor, gearbox, etc.) at the assembly stage and the differentiation of the car design, its equipment, as well as the sales and marketing system. Firms in specialized industries are considered to have different but significant advantages, so the success of a firm is independent of size. These industries also use a focusing strategy (for example, the production of exclusively prestigious Mercedes cars by Daimler-Chrysler).

The proposed modification of portfolio analysis is more focused on the external environment of the enterprise. It shows that the most preferred modern market becomes the specialization of enterprises, supported by strategies of product differentiation, focusing and / or low costs.

Another type of portfolio matrix, called "business screen", was developed McKincey Advisory Group together with corporation General Electric. It consists of nine parts and is based on an assessment of the long-term attractiveness of the industry and the “strength”/competitive position of the strategic business unit (Figure 8.2).

The McKincey matrix includes more factors than Boston Matrix. The market growth factor has been transformed in this model into a multifactorial concept of “attractiveness of the market (industry)”, and the market share factor has been transformed into a strategic position (competitive position) of business units. Moreover, McKincey experts believe that the factors that determine the attractiveness of the industry and the position of business in individual markets are different. Therefore, when analyzing each market, one should first highlight the factors that best meet the specifics of the market. this market and then try to objectively rank them using three levels: low, medium, high. A possible list of such factors is given in Table. 8.2.

Rice. 8.2. Portfolio Analysis Matrix McKincey - General Electric

The most characteristic positions are in the corner quadrants of the matrix. Intermediate positions are often difficult to interpret because a high score on one parameter may be combined with a low score on another, or there may be average scores for all criteria.

Table 8.2

Market attractiveness factors
and strategic business position

The end of the table. 8.2

Market attractiveness	Strategic position
Market characteristics (industries)
market cyclicality (annual fluctuations in sales); the importance of foreign markets; other opportunities and threats of the industry environment		effectiveness of the marketing system
Competition factors
the level of competition in the market; trends in the number of competitors; benefits of industry leaders; sensitivity to substitute products	relative market share (usually estimated share domestic market and market share relative to the top three competitors); the potential of the company and its competitive advantages
Financial and economic factors
barriers to entry and exit from the industry; the level of utilization of production capacities; industry level of profitability; industry cost structure	the level of utilization of the firm's capacity; level of profitability; technological development; firm's cost structure
Socio-psychological factors
social environment; legal business restrictions	corporate culture; employee performance; company image

The main strategic alternatives to this matrix are:

Invest to keep your position and follow the development of the market;

Invest in order to improve your position, shifting to the right in the matrix, in the direction of increasing competitiveness;

Invest to regain lost ground. Such a strategy is difficult to implement if the attractiveness of the market is weak or medium;

Reduce investment with the intent to "harvest", such as by selling a business;

Deinvest and leave a market (or market segment) with low attractiveness, where the company cannot achieve a significant competitive advantage.

To build the McKincey - General Electric matrix, the following steps are recommended:

1. Assess the attractiveness of the industry by completing the following procedures:

a) select essential evaluation criteria (key success factors for this industry market);

b) assign a weight to each factor that reflects its significance in the light of corporate goals (the sum of the weights is equal to one);

c) evaluate the market for each of the selected criteria from one (unattractive) to five (very attractive);

d) multiplying the weight by the assessment and summing the obtained values for all factors, we get a weighted assessment/rating of the attractiveness of the market.

Industry attractiveness ratings range from one
tsy - attractiveness is low (competitive positions are weak) up to five - attractiveness of the industry is high (very strong competitive position of the business), a mark of "three" is given for average values of key parameters.

2. Assess the “strength” of the business / competitive position using a procedure similar to that described in the previous step. The result is a weighted score, or rating, of the competitive position of the analyzed strategic business unit.

3. All divisions of the corporate portfolio, ranked at the previous stages, are positioned, and their parameters are entered into the matrix. In this case, the coordinates of the centers of each circle coincide with the parameters of the corresponding business units calculated in steps 1 and 2. The matrix constructed in this way characterizes the current state of the corporate portfolio.

4. The analysis of a corporate portfolio can be considered complete only when its current state is projected into the future. To do this, it is necessary to assess the impact of predicted changes in the external environment on the future attractiveness of the industry and the competitive position of the strategic business unit. Managers need to understand whether the corporate portfolio will improve or deteriorate in the future? Is there a gap between its predicted and desired state? If the answer is yes, then the expected gap should serve as an incentive to rethink the corporate mission, goals and strategies.

In general, this matrix is more advanced, since it considers a significantly larger number of factors, which is why it does not lead to such simplified conclusions as the Boston matrix. It is more flexible, as the indicators are selected based on the specific situation. However, unlike the BCG matrix, there is no logical relationship between competitiveness indicators and cash flows. Since this method does not proceed from any particular hypothesis, its scope is wider. However, some researchers note that, in contrast to the BCG matrix, the results obtained are based on subjective assessments. To increase the objectivity of the assessments, it is recommended to involve a group of independent experts.

The main general shortcomings of portfolio analysis methods that are inherent in the McKincey matrix:

Difficulties in taking into account market relations (boundaries and scale of the market), too many criteria. As the number of factors grows, their measurement becomes more difficult;

Subjectivity of assessments of positions of business units;

The static nature of the model;

In addition to the presented methods of portfolio analysis, there are matrices from Arthur D. Little and Ansoff, as well as the three-dimensional Abel scheme and business complex analysis(PIMS project). Each of these methods should be used in a specific situation, as it has its own advantages and disadvantages.

1. Define the term "enterprise portfolio".

2. What is portfolio analysis for? What level of organizational environment is he exploring?

3. What is the theoretical basis of portfolio analysis?

4. What problems can an organization solve with portfolio analysis?

5. What measures are used to measure business units in the Boston Consulting Group Matrix?

6. Indicate the main advantages and disadvantages of portfolio analysis using the matrix of the Boston Consulting Group.

7. What is the essence of the Boston Matrix modification?

8. What indicators form the basis of the McKincey - General Electric matrix? What are its main advantages and disadvantages?

MINISTRY OF EDUCATION AND SCIENCE

RUSSIAN FEDERATION

FEDERAL AGENCY FOR EDUCATION

State educational institution of higher vocational education

"RUSSIAN STATE TRADE AND ECONOMIC UNIVERSITY"

Branch in Losino-Petrovsky

FACULTY OF ECONOMICS

TEST

Option number 22

by discipline " Strategic management»

(name of the discipline)

Topic: "PORTFOLIO ANALYSIS"

Completed by a student of the 3rd year of the 04-07 group

distance learning

specialty management organization

Lunina Natalya Alekseevna

(name in full)

Supervisor

__Smirnov Andrey Anatolievich ______________

(full name, academic degree, title)

Mark of admission (non-admission) to protection _______

"___" ___________________ 200__ ____________________________

(Signature of the head)

INTRODUCTION

Strategic analysis originated in the late 1960s. At this time, large firms and most medium-sized firms turned into complexes that combined the production of heterogeneous products and went to many commodity markets. However, growth continued far from all markets, and some of them were not even promising. This discrepancy has arisen due to differences in the degree of saturation of demand, changing economic, political and social conditions, increasing competition and the rapid pace of technology upgrades.
It became obvious that moving into new industries would not help the company solve its problems. strategic issues Or use your full potential. The situation required managers to radically change their perspective. Under such conditions, extrapolation has been replaced by strategic planning and portfolio analysis.

The unit of portfolio analysis is the "strategic business zone" (SZH). SZH is any market to which the company has or is trying to find a way out. Each SBA is characterized by a certain type of demand, as well as a certain technology. As soon as one technology is replaced by another, the problem of the ratio of technologies becomes the strategic choice of the firm. In the course of a strategic analysis, the firm evaluates the prospects for a particular area of activity. The strategic analysis of a diversified company is called portfolio analysis.
An enterprise portfolio, or a corporate portfolio, is a set of relatively independent business units (strategic business units) owned by one owner.

Portfolio analysis is a tool by which the company's management identifies and evaluates its business activities in order to invest in the most profitable or promising areas and reduce / stop investing in inefficient projects. At the same time, the relative attractiveness of the markets and the competitiveness of the enterprise in each of these markets are assessed. It is assumed that the company's portfolio should be balanced, i.e. the right combination of products in need of capital for further development must be ensured with economic units that have some excess capital.

OBJECTIVES AND MAIN STAGES OF PORTFOLIO ANALYSIS

The purpose of portfolio analysis is to harmonize business strategies and allocate financial resources between business units of the company. Portfolio analysis, in general view, is carried out according to the following scheme:

1. All activities of the enterprise (product range) are broken down into strategic business units, and levels in the organization are selected to analyze the business portfolio.

2. The relative competitiveness of individual business units and the development prospects of the respective markets are determined. Data collection and analysis in this case is carried out in the following areas:

o industry attractiveness;

o competitive position;

o opportunities and threats to the firm;

o resources and qualifications of personnel.

3. Portfolio matrices (strategic planning matrices) are built and analyzed and the desired portfolio of businesses and the desired competitive position are determined.

4. A strategy is developed for each business unit, and business units with similar strategies are combined into homogeneous groups.

Next, management evaluates the strategies of all divisions in terms of their alignment with the corporate strategy, commensurate the profit and resources required by each division, using portfolio analysis matrices. At the same time, business portfolio analysis matrices are not in themselves a decision-making tool. They only show the state of the portfolio of businesses, which should be taken into account by management when making a decision.

In practice, portfolio analysis at the enterprise is carried out taking into account a number of strategic components. A well-known specialist in the field of strategic management, Igor Ansoff, identifies four strategic components of portfolio analysis (Fig. 1):

Figure 1. Components of portfolio analysis (I. Ansoff)

First component- the vector of growth, which determines the scale and direction of the future sphere of activity of the enterprise. The components of the growth vector are product and market expansion.

Of particular importance in terms market economy has a consistent and economically justified definition of strategic directions for the development of service enterprises based on the use of the specified matrix:

1. Market penetration or business improvement. When choosing this strategic direction, it is necessary to carry out marketing events to increase the existing market share, namely: attracting new users, including customers of competing enterprises through advertising, improving the quality of products (services provided), providing more favorable conditions, trade discounts, use of shortcomings in the activities of competitors. This direction requires high costs, since “in addition to investments in technology and production, it is accompanied by the use of relatively low prices compared to competitors”; mergers or acquisitions of competing enterprises.

2. Market development. This strategy is aimed at finding new segments of the market for goods (services) for already mastered types of production services. If, for example, an enterprise provides services mainly to legal entities, then within the framework of this strategy, it can expand the range of services by providing them and individuals. In addition, it is possible for the enterprise to enter neighboring farms, other districts and regions with its proposals.

3. Creation of new products (services). This strategy of creating new types of goods (services) and improving existing ones is aimed at increasing the scope of their sales. At the same time, the company searches for additional niches in the already existing and well-known area of the service market, based on the existing needs of customers.

4. An important strategic direction is diversification, which is associated with the development of new types of services with the simultaneous development of new segments of the service market. Diversification is the expansion of economic activity into new areas (expanding the types of services provided, the geographical scope of activities, etc.). In the narrow sense of the word, diversification refers to the penetration of enterprises into industries that do not have a direct industrial connection or functional dependence on their main activity. The company must make a decision on the implementation of diversification in the conditions of excessive saturation of the service market and falling demand for them, increased competition, as well as in the presence of accumulated free financial resources, which at the moment are more profitable to invest in highly attractive industries than in current activities.

There are the following types of diversification (Fig. 2):

Figure 2. Types of diversification

1. Related vertical diversification (direct or reverse). With linked vertical diversification ( vertical integration) the service enterprise acquires new types of production and products that are used in the technological chain before (reverse integration) or after (direct integration) the service enterprise. So, in the system of logistics, it makes sense for a service company to become a dealer of manufacturers of agricultural machinery and spare parts. In this case, the company acquires a strong competitive advantage- a stable source of supply and support for the producer of means of production. And in the field of processing and bringing agricultural products to the consumer, it is possible for a service enterprise to acquire such production facilities as mills, bakeries, various processing mini-factories in the countryside and in small towns, which, in turn, will make it possible to more rationally and profitably dispose of agricultural products received from farms in payment for services, rather than simply reselling it without processing to other consumers. At the same time, it should be borne in mind that the possibilities of the service enterprise in the indicated direction of direct integration are somewhat limited, since it itself, without intermediaries, is engaged in the sale of earned products.

2. Related horizontal diversification (expanding the range of products or geographic expansion). With related horizontal diversification (horizontal integration), the specificity is that competing enterprises operating in the same area are consolidated. Thus, a more profitable MTS can buy out other service companies, including those outside its service area, in order to weaken competition and strengthen its position, expand the range of services and attract new customers through geographic expansion.

3. Unrelated diversification. In unrelated diversification, an enterprise chooses activities that are not related to its production resources and technologies and, therefore, do not belong to its service sector. An example of a real diversification of a service enterprise is the activity of Zirganskaya MTS OJSC of the Republic of Bashkortostan (RB), where, in addition to a range of agricultural services, other types of commercial and industrial activities are being developed. These include: the manufacture of building materials and spare parts, the production of animal feed, the sale of consumer goods, etc. Another service organization of the Republic of Belarus JSC "Abzelilovsky repair and technical enterprise", in addition to repair and technical services, includes such divisions as a section for the installation and maintenance of a gas economy, a water supply section, a line for the manufacture of cultivators' paws and other spare parts, assemblies for machine and tractor park, a site for the manufacture of various metal products from the waste of the main production.

Second component portfolio analysis - the competitive advantage of the enterprise. There are various ways to achieve competitive advantages, among which the following main ones can be distinguished: cost minimization, differentiation of goods (services) and early market entry.

When implementing a strategy to minimize total costs, it is important for an enterprise to conduct a thorough analysis of its costs and appropriate measures aimed at reducing all costs and achieving production efficiency. It should be borne in mind that achieving advantages due to the relatively low cost of services and their implementation in the required agrotechnical terms compared to competitors is a very urgent task in the agricultural sector of the economy, where most consumers of services are primarily sensitive to their price and urgency.

The strategy of differentiation of goods (services) is associated with the development of a number of their essential features that distinguish them from the goods (services) of competitors. To successfully implement this strategy, the enterprise must identify the possible needs of customers in order to clarify what they are not satisfied with in existing goods (services) and what changes need to be made to meet the expected growth in customer needs. Moreover, such differentiation allows the company to increase profits, since in this case the determining factor for consumers is not the price, but their specific features and differences from the services of competitors.

By implementing the strategy of early entry into the market of goods (services) with original offers, a service enterprise can provide itself with a competitive advantage that allows it to achieve increased profits and rapid economic growth. Note that in the services market, due to their differences from goods, it is much more difficult to protect original developments with the help of copyright certificates for inventions and patents than in the market for new products. Therefore, such a competitive advantage does not last long and is relatively easier to win than to keep, since competitors quickly copy the innovations used by the leading enterprise.

Third component portfolio analysis - synergy, which in the literature is given the following definition: "the phenomenon when the income from the joint use of resources exceeds the amount of income from the use of the same resources separately, is often called the effect" 2 + 2 = 5 ". We will call this effect synergy.” In other words, it is getting more economic effect as a result of the interaction of factors of production. Synergy can be not only positive, but also negative. The latter is possible when an enterprise diversifies into a highly competitive industry without sufficient experience and management skills in it.

Fourth component is the strategic flexibility of a portfolio of different activities. It provides that the enterprise has such opportunities that allow it, if necessary, to effectively diversify into other industries. As I. Ansoff emphasizes, the development of any component of portfolio analysis can lead to a weakening of the others, for example, an increase in the strategic flexibility of management leads to a decrease in the overall potential synergy.

Depending on the plans of the enterprise for the implementation of a particular strategy, the goals of its further development, as well as the current strategic position in a particular sector of the economy, approaches are chosen to assess the competitive positions of strategic business units and the attractiveness of the market. The following approaches are best known in the literature:

· Portfolio Matrix of the Boston Consulting Group (BCG Matrix);

· "General Electric - McKinsey" or "business screen";

· Matrix consulting company Arthur D. Little;

Shell's Directed Policy Matrix;

Ansoff matrix;

Abel matrix.

PORTFOLIO ANALYSIS MODELS

Boston Consulting Group Matrix

One of the most common portfolio analysis models is matrix of the Boston Consulting Group (BCG), also called the “growth - market share” matrix, since the indicators of the relative market share and growth rates of the industry market are taken as coordinates here (Fig. 3).

Figure 3. Matrix “growth - market share”

Positioning the full range of information products and services of the company on the BCG matrix allows you to formulate the main strategies that the business unit must adhere to.

The main positive features of the BCG method are a serious theoretical study, the use of objective indicators (which reduces the possible subjectivity of assessments), simplicity, clarity and expressiveness of both the analysis process and the results obtained.

From a practical point of view, the construction and analysis of the matrix allows you to get a simple and visual idea of the place and comparative strength of each business unit in the corporate portfolio, analyze the dynamics of development and formulate promising strategies for each business unit, as well as make informed decisions on the redistribution of financial flows between various business units in order to implement the chosen strategies.

McKincey Matrix

Proposed by the General Electric Company and the consulting firm McKincey, the matrix "industry attractiveness - competitive position" is free from some of the shortcomings inherent in the matrix of the Boston Consulting Group. In particular, unlike the BCG matrix, here instead of two gradations along each of the axes, three are introduced, and thus a 3x3 matrix is obtained, considered in the two-dimensional coordinate system “attractiveness of the industry - position in competition”.

The long-term attractiveness of the industry is considered as an integral characteristic, determined on the basis of an assessment of a certain set of factors. At the same time, in different situations various factors may be involved, including: the capacity (size) of the market and its expected growth; market accessibility; industry profitability; technological state; degree of sharpness of competition; assessment of opportunities and threats; the duration of the life cycle, as well as seasonal and cyclical fluctuations; the degree of dependence on the social and political situation, state regulation, and etc.

Competitive position is also assessed based on the values of a certain set of relevant factors, such as: relative market share in relation to the leader; the relative level of costs compared to a direct competitor; the degree of mastering the technology; the level of management and the level of profitability relative to competitors; the ability to compete on price and quality; image, product awareness, etc.

Estimates of the attractiveness of the industry and competitive position are made for each type of product, after which the matrix “attractiveness of the industry - position in competition” is built (Fig. 3.). As in the BCG matrix, here the area of circles carries its own semantic load. It reflects the share of the total revenue from the sale of the product, and the selected sectors - the market share compared to the nearest competitor. Sub-diagonal shaded cells of the matrix are zones with low priority for investment, unfilled diagonal ones - with medium priority, and filled with light gray supra-diagonal ones - with high priority. Recommended according to the strategy are reflected directly on the matrix (Fig. 4).

Considering fig. 4, one can notice some parallel with the BCG matrix - the strategies given in the corner quadrants of this matrix are similar to the corresponding strategies prescribed by the BCG matrix (“Question Marks”, “Stars”, “Cash Cows”, “Dogs”). The McKinsey model, despite its great complexity compared to other models, has become widespread. Many variations of this model are known, associated both with an increase in the number of factors considered, and with an expansion of the set strategic decisions.

Figure 4. McKinsey Matrix

Weak side matrices BCG and McKinsey is their focus on the short term. In order to better identify the types of businesses that are on the rise and take into account the long term, models using the concept of the life cycle are attracted.

ADL/LC Matrix

The “ADL/LC” model (Arthur D. Little / Life Cycle) is one of the most common models that uses the concept of the life cycle of a business unit or industry. It is assumed here that any business consistently goes through the stages of birth, development, maturity and decline in its existence. An analysis of the position of a particular business is carried out in the coordinate axes “stage of the product life cycle - relative position in the market (competitive position of the business)”. According to the model, the relative position of a business in the market can be leading, strong, visible, strong, weak. Thus, a 4x5 matrix is obtained (Fig. 5). The procedure for choosing strategic decisions consists of three steps. In the first step, the strategy is pre- and general form is determined in accordance with which cell of the matrix this particular business occupies. The second step takes into account the positioning of the business within a given cell of the matrix. Depending on the position, the choice of lines for the further movement of the business and the concretization of strategies are carried out here, although the formulations of the strategies here are also still quite general character. Each of the matrix cells has its own possible strategic routes along the line of natural development or the line of selective development (Fig. 5), and, accordingly, its own set of refined strategies. Therefore, at the third step, the choice of a refined strategy corresponding to the chosen path of business development is carried out. Here, for each of the possible situations, a specific set of combinations of 24 refined strategies is proposed, the latter being formulated in terms of business transactions.

Figure 5. Matrix of the ADL/LC model

Strengths that characterize the relative position of a business in the market can determine such variables as: the degree of patent protection; production efficiency; degree of vertical integration; attitude of management towards possible risks, and etc.

As in the case of the McKinsey matrix, obtaining an integral assessment is based on the use of weight coefficients and expert data. The choice of specific parameters (their number can reach 10) may be dictated by a specific situation, while the calculation method is similar to the McKinsey matrix.

Within the framework of the ADL-LC model, it is possible to carry out not only static, but also dynamic analysis, as well as forecasting both in the short and long term.

Shell/DPM model

Another model of strategic analysis is the "directed policy matrix", which was developed by the British-Dutch company Shell. The directional policy matrix has an outward resemblance to the General Electric-McKinsey matrix, but at the same time it is a kind of development of the idea of strategic business positioning, embedded in the BCG model. The Shell/DPM matrix (Fig. 6) is a 3x3 two-factor matrix. It is based on assessments of both quantitative and qualitative business parameters.

The following indicators are located along the axes of the Shell/DPM matrix:

· perspectives of the business sector;

business competitiveness.

The Shell/DPM model puts more emphasis on quantification than the GE-McKinsey model. The Shell/DPM model evaluates both cash flow (BCG matrix) and return on investment (GE-McKinsey matrix). As in the GE-McKinsey model, businesses that are at different stages of their life cycle can be valued here.

The x-axis in the directional policy matrix reflects strengths enterprises (competitive position), and along the Y axis - industry attractiveness. The y-axis is a general measure of the state and prospects of an industry.

Figure 6. Shell/DPM Model

Each of the nine cells of the matrix corresponds to a specific strategy:

Business leader - the company has a strong position in an attractive industry. The development strategy of the enterprise should be aimed at protecting its leading positions and further development business.

Growth strategy - the company has a strong position in a moderately attractive industry. The company needs to try to maintain its position.

Cash Generator Strategy – The company is in a strong position in an unattractive industry. The main task of the enterprise is to extract the maximum income.

Competitive advantage strategy - the company is in the middle position in an attractive industry. It is necessary to invest in order to move into a leadership position.

Proceed with caution - the company is in the middle position in the industry with an average attractiveness. Careful investment with a quick return.

Roll-out strategy - the company is in the middle position in an unattractive industry. You should extract the maximum income from what is left, and then invest in promising industries.
Doubling the volume of production or winding down the business - the company is in a weak position in an attractive industry. The company must either invest or leave the business.

Continue business with caution or partially curtail production - the company is in a weak position in a moderately attractive industry. Try to stay in the industry while it makes a profit.

Exit strategy - the company is in a weak position in an unattractive industry. The company needs to get rid of such business.

The variables of company competitiveness and industry attractiveness that are used by the Shell/DPM matrix are presented in Table 1.

Table 1. Competitiveness variables

companies and industry attractiveness

Variables characterizing the competitiveness of the enterprise (X-axis)

Variables characterizing the attractiveness of the industry (Y-axis)

Relative market share

Distributor network coverage

Distribution network efficiency

Technological Skills

Product Line Width and Depth

Equipment and location

Production efficiency

Experience Curve

Productive reserves

Product quality

Research potential

Economies of scale in production

After-sales service

Industry Growth Rate

Relative industry rate of return Purchase price

Buyer commitment trademark

Significance of competitive lead Relative stability of the industry rate of return

Technological barriers to entry into the industry

Significance of contractual discipline in the industry

Influence of suppliers in the industry

Influence of the state in the industry

Industry Capacity Utilization

Product replacement

The image of the industry in society

Development prospects

Ansoff matrix

Igor Ansoff's matrix (tab. 2) is intended to describe the possible strategies of an enterprise in a growing market.
On one axis in the matrix, the type of product is considered - old or new, on the other axis - the type of market, also old or new.

Performance Improvement Strategy. When choosing this strategy, the company is recommended to pay attention to marketing activities for existing products in existing markets: conduct a study of the target market of the enterprise, develop measures to promote products and increase the efficiency of activities in the existing market.

Product expansion is a strategy to develop new or improve existing products in order to increase sales. A company can implement such a strategy in an already known market by finding and filling market niches. Income in this case is provided by maintaining market share in the future. Such a strategy is most preferable in terms of risk minimization, since the company operates in a familiar market.

Market development strategy. This strategy is aimed at finding a new market or a new market segment for already mastered goods. Income is provided through the expansion of the sales market within the geographic region, and beyond it. Such a strategy is associated with significant costs and is more risky than both previous ones, but more profitable. However, it is difficult to enter new geographic markets directly, as they are occupied by other companies.

The diversification strategy involves the development of new types of products at the same time as the development of new markets. At the same time, goods can be new for all companies operating in the target market or only for this business entity. Such a strategy provides profit, stability and sustainability of the company in the distant future, but it is the most risky and costly.

Abel matrix

Abel proposed to define the field of business in three dimensions:

Served groups of buyers;

The needs of buyers

The technology used in the development and production of the product.

Figure 7. The field of possible strategies (according to D. Abel)

The first major criterion for assessing the Abel matrix is the compliance of the considered industry with the general direction of the company, in order to use synergies in technology and marketing. Other selection criteria are the attractiveness of the industry and the "strength" of the business (competitiveness).

CONCLUSION

Thus, in order to carry out portfolio analysis, an enterprise must be described as a portfolio consisting of certain business units and product lines, i.e. as their totality (by analogy with a portfolio of securities). In this case, the "portfolio" must be proportional, i.e. be a combination of strategic business units earning and spending financial resources, at which good liquidity of the enterprise is constantly ensured.

The portfolio analysis method allows you to determine the chances and risks for a particular product, product line or entire business unit using a system of certain criteria. If you group these criteria into two main groups (or dimensions), then you can build a 2-dimensional matrix and place the business units of the enterprise in it. At the same time, on one of the axes of the matrix, they usually indicate the value that the company can influence, for example, market share, relative competitive advantage, while on the other - factors that the company cannot directly influence, market-oriented factors, for example, market volume , life cycle phase, market growth.

Thus, criteria that are important to the enterprise are first selected, and then the business units of the enterprise are evaluated in terms of these criteria and placed in a matrix.

LIST OF USED LITERATURE

1. Thompson Jr., Arthur A., Strickland III, A. J. Strategic management: concepts and situations for analysis, 12th edition: Per. from English. – M.: Ed. house "Williams", 2006. - 928 p.

2. Lime Faey, Robert Randell (ed.) MBA course in strategic management / Per. from English. – M.: Alpina Publisher, 2002. – 608 p.

3. Fatkhutdinov R.A. Strategic Management: Textbook. - 7th ed., Rev. and additional M.: Delo, 2005. - 448 p.

4. Strategic management / Ed. PetrovaA. N. - St. Petersburg: Peter, 2005. - 496 p.: ill. - (Series "Textbook for universities").

5. http://www.marketing-guide.org

6. http://surin.marketolog.biz

7. http://www.ereport.ru

The procedure for assessing the quality of the organization's work and determining promising directions investment, analysis of the competitiveness of the organization and the potential of sales markets.

Portfolio analysis in assessing the direction of development of the enterprise is one of the most effective tools. It is simply indispensable during the development of an organization's strategy and the determination of the correct priorities in its investment policy.

Strategic Components

When conducting a portfolio analysis, quite a lot of various factors and aspects are taken into account. Special attention focuses on the following four strategic pillars:

strategic flexibility. This concept implies that the structure has various plans that allow you to quickly change the general course of its development.
Synergy - obtaining additional profits in the implementation of investment policy due to the successful combination of several individual factors.
Enterprise competitiveness.
Growth vector. It is on its basis that the directions of investment activity and its scale are determined in the future. The main elements of the growth vector are the structure of product groups and the dynamic expansion of the sales market.

Portfolio analysis methodology

Almost all methods of portfolio analysis involve the construction of special two-dimensional matrices, with which you can compare financial structures and product groups according to certain criteria. Most often, specialists use:

Ansoff matrix. Thanks to it, it becomes possible to develop an optimal investment strategy in an ever-expanding market.
Matrix by Arthur D. Little. Its main advantages lie in its amazing flexibility and the ability to correctly assess the pros and cons of all investment directions with its help. It takes into account data on life cycle company and the factors influencing the position of the business in the market.
Directed Policy Matrix. It was developed by specialists from Shell. Allows you to balance the budget of the organization. The main disadvantage is the possibility of using only large corporations and structures.
McKinsey Matrix. Provides an opportunity to choose the right investment directions in the face of fierce competition. Unfortunately, it does not work in a number of cases, as experts have repeatedly stated.
Matrix of the Boston Consulting Group, which takes into account only 2 indicators - the ratio of the budgets of the company and its competitors, as well as the share of the structure in the market in relation to annual growth.