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The STRATPORT model of Larreche and Srinivasan
(1981, 1982)
is a decision support system for the allocation of a firm's financial
resources across its Strategic Business Units (portfolio analysis). The
approach models the impact of general marketing expenditures on both
market share and on the firm's cost structure. Given a specific portfolio
strategy, the system can evaluate the profit and cash flow implications of
following that strategy over time. Alternately, the approach can determine
the optimal allocation of marketing expenditures across Strategic Business
Units in order to maximize net present value over a specified time
horizon.
In the Boston Consulting Group approach
(BCG Matrix), relative market share
and the market growth are used to classify business units as Question
Marks, Stars, Cash Cows, or Dogs. In the
General Electric/McKinsey approach,
the business units are classified into nine groups according to company
strength and industry attractiveness. The position of a given business
unit on each of these dimensions is determined qualitatively from a number
of market, competitive. environmental, and internal factors. The Royal
Dutch Shell approach is somewhat similar although the two dimensions are
called company's competitive capabilities and prospects for sector
profitability, and the set of factors and their integration into these
composite dimensions are also different. The philosophy underlying these
approaches is, however, similar. At a given point in time, each business
unit has a specific role in the portfolio according to its short-term and
long-term economic potential. This role determines the allocation of
financial resources among elements of the portfolio. Minimum or
maintenance investments will be made in a group of business units so that
they generate a maximum cash flow in the short term.
The STRATPORT model
(for STRATegic PORTfolio planning)
decision support system, is an on-line computerized mathematical
model utilizing empirical and (managerial) judgment-based data. This
system was designed to assist top managers and corporate planners in the
evaluation and formulation of business portfolio strategies, and it
represents both an operationalization and extension of the
business portfolio analysis approaches previously mentioned.
Compare: Brand Asset Valuator
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BCG
Matrix |
GE / McKinsey Matrix |
Core Competence |
Reputation Quotient
| Brand
Personality Dimensions |
Product Life Cycle |
Bass Diffusion
model |
Positioning
More management models
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