Process For Portfolio Analysis in Strategic Management
- Identify Lines of Business. The first step of business portfolio analysis in strategic management is to identify all the current business lines and strategic business units.
- Group Lines of Business
- Compare Core Businesses with Mission. ...
- Define Products in Each Line of Business. ...
- Apply the Program Evaluation Matrix. ...
- Determine the Alternatives. ...
What is strategic portfolio?
Strategic portfolio management is a framework in which analytical tools and a set of clearly defined ongoing meetings are used to identify which assets, programs, and wells E&P companies should invest in. It encourages companies to make all of their decisions using a capabilities lens. At a time of severe capital constraints, strategic ...
How to analyze your portfolio?
To access the new Investment Checkup features:
- Sign up for Personal Capital or sign in if you are an existing user.
- Click the Investing Tab on the top of your dashboard
- Click Investment Checkup from the drop down men
- Click STOCKS (right of Allocation, left of Costs options) to get an assessment of all your investment accounts.
How to analyze portfolio performance?
Video Script
- Portfolio Performance Basics. For Step 1 and before any analysis of performance begins, we must first figure out what we're starting with, meaning the data and the ...
- Build an Active Portfolio. Let's move on to Step 2 and create an active portfolio and name it the Acme fund. ...
- Three Portfolio Performance Measures. ...
- Interpret Portfolio Performance. ...
How do I analyze my investment portfolio?
The 6 Best Portfolio Analysis Tools for 2021
- Morningstar Instant X-Ray. Morningstar Instant X-Ray has the advantage of being what other services uses to do a lot of their analysis and reporting.
- Stock Rover. ...
- Portfolio Visualizer. ...
- Personal Capital. ...
- Sigfig. ...
- Quicken Premier. ...
- Final Verdict. ...
What is a portfolio analysis strategy?
Portfolio analysis in strategic management involves analyzing every aspect of product mix to identify and evaluate all products or service groups offered by the company on the market, to prepare the detailed strategies for each part of the product mix to improve the growth rate.
What is a strategic portfolio?
Strategic Portfolio Management is about the selection and prioritization of programs and projects, including aligning resource demand with resource availability to achieve a set of strategic goals. SPM is primarily concerned with choosing the right projects in accordance with a pre-established set of business drivers.
What is strategic portfolio analysis review?
What is it? The Strategic Portfolio Analysis Review (SPAR) enables Army senior leaders to make informed resource decisions within a larger strategic framework.
What is the meaning of strategic analysis?
Strategic analysis refers to the process of researching an organization and its working environment to formulate a strategy. There are many other definitions of strategic analysis with a different perspective. But they all involve a lot of common factors.
What is the purpose of portfolio analysis?
Portfolio Analysis is one of the areas of investment management that enables market participants to analyze and assess the performance of a portfolio (equities, bonds, alternative investments etc) with the objective of measuring performance on a relative and absolute basis along with its associated risks.
How do you create a strategy portfolio?
Once a portfolio is in place, it's important to monitor the investment and ideally reassess goals annually, making changes as needed.Step 1: Assess the Current Situation. ... Step 2: Establish Investment Objectives. ... Step 3: Determine Asset Allocation. ... Step 4: Select Investment Options. ... Step 5: Monitor, Measure, and Rebalance.
How does project management relate to strategic portfolio?
Project Management helps ensure that projects are done right. Strategic Portfolio Management determines the very future of the enterprise; its competitiveness, and ultimately, its survival.
How organization strategy and portfolio management is related to one another?
Portfolio management is the coordinated management of one or more portfolios to achieve organizational strategies and objectives. The ultimate goal of linking portfolio management with organizational strategy is to establish a balanced, executable plan that will help the organization achieve its goals.
What is strategic analysis example?
It is a strategic tool used to look at 'the big picture'. It focuses on changes to the business environment that can have either a positive or negative impact. For example, a positive impact may be the introduction of a new technology enabling a company to reach a larger number of customers.
What are the 4 types of strategies under strategic analysis?
Types of Corporate Level Strategy – 4 Major Types: Stability Strategy, Expansion Strategy, Retrenchment Strategy and Combination Strategy. The corporate level generic strategies pertain to identify the businesses the company shall be engaged in.
What are types of strategic analysis?
These include: SWOT (strengths, weaknesses, opportunities, threats) analysis. PESTLE (political, economic, social, technological, legal and environmental) analysis. scenario planning.
What are the types of portfolio?
Three types A showcase portfolio contains products that demonstrate how capable the owner is at any given moment. An assessment portfolio contains products that can be used to assess the owner's competences. A development portfolio shows how the owner (has) developed and therefore demonstrates growth.
Why is strategic portfolio management important?
Strategic portfolio management is important for any project manager or portfolio manager because it creates a strong link between a team's strategy and its operations. If you think about it, portfolio management is all about choosing the right things to do. Project management is all about doing things the right way.
What do you mean by portfolio?
A portfolio is a collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange traded funds (ETFs). People generally believe that stocks, bonds, and cash comprise the core of a portfolio.
What are three basic categories for project portfolios?
Three General Types of PortfoliosValue creating: Strategic or enterprise projects.Operational: Projects that make the organization more efficient and satisfy some fundamental functional work.Compliance: "Must-do " projects required to maintain regulatory compliance.
Why is strategic portfolio analysis important?
In such a situation, strategic portfolio analysis helps the management make choices in the form of master strategies as well as programme strategies (included would be competitive strategies, financial strategies, ...
What is organisational portfolio?
The formulation of the organisational portfolio plan is the final phase of the strategic planning process. Strategic portfolio analysis assumes that most organisations, at a particular time and in reality, are a portfolio of businesses. For example, an appliance manufacturer may have several product lines (such as TV, Refrigerators, Stereos, ...
What is portfolio matrix?
In practice, however, portfolio matrices are used to classify various businesses for resource-allocation purposes.
What is a corporate portfolio?
In other words, the corporate portfolio consists of all of the businesses, product lines, divisions or other components of the parent multi -industry ...
What are the two viable strategies for QUESTION MARK SBU?
The BCG believes that the only two viable strategies exist for QUESTION MARK SBU: growing the SBU into a star or divesting (getting rid of it). Since DOGS (our apologies to fellow dog lovers) hold little promise for the future and may not even pay their own way, they are prime candidates for divestiture.
What is portfolio analysis?
Portfolio analysis is a systematic way to analyze the products and services that make up an association's business portfolio.All associations (ex cept the simplest and the smallest) are involved in more than one business.Some of these include publishing, meetings and conventions, education and training, government representation, research, standards setting, public relations, etc.Each of these is one of the association's strategic business units (SBUs).Each business consists of a portfolio of products and services.
What is strategic business unit?
Strategic business units may be a composite of product and geographical area. It is quite possible for a product to be in a mature stage in developed countries and in a take-off phase in less developed ones.
What is program evaluation matrix?
The Program Evaluation Matrix is a graphic device that simplifies the process of analyzing all the products and services in the association's portfolio of products and services. In running its programs through the Program Evaluation Matrix, the association makes several assumptions.
Is portfolio analysis easy to define?
Portfolio analysis does, however, have some limitations. It is not easy to define product/market segments. It provides an illusion of scientific rigor when some subjective judgments are involved.
Is portfolio analysis a subjective tool?
Considering both its advantages and disadvantages, portfolio analysis should be regarded as a disciplined and organized way of thinking about asset allocation. It is only a subjective tool, however, and is not a substitute for the ultimate professional judgment of the responsible decision-makers.
Abstract
This paper is a case study in strategic portfolio management focusing on one example from the United States, the Boeing 787 and one example from EMEA, the EADS Airbus A380.
The organizational context of strategic portfolio management
Based on figure 1.3 in The Standard for Portfolio Management, Second Edition, 2008, Project Management Institute
A senior executive perspective on strategy development and the role of portfolio management in execution
As the three forces of 1) globalization, 2) changing technology, and 3) demanding ownership (investors) have converged, many executives have concluded they have no choice but to equip their organization for rapid response to whatever changes may occur next in the competitive environment.
A preview of the second edition of the The Standard for Portfolio Management
Exhibit 9 is based the 2008 Exposure Draft of The Standard for Portfolio Management (Exhibit 1-4 in the Exposure Draft). Between the 2006 and 2008 editions of the standard, the number of processes in the portfolio management portion section of the exhibit was doubled from seven to fourteen processes.
A closed-loop strategic portfolio management model designed with the chief executive and the executive leadership team in mind
The PMI Portfolio Standard Charter states strategic portfolio management is the responsibility of the executive leadership team of the organization, where those involved are deciding if the projects and programs selected for execution align with the organization's strategies.
Portfolio Best Practices: The Boeing 787 Dreamliner
At Boeing there are portfolios within portfolios. Based on 2007 revenue, Boeing Commercial Airplanes represents approximately fifty percent of the overall Boeing Corporation portfolio. There are five aircraft programs within the Commercial Airplane portfolio.
Conclusions
Full Disclosure: The following are solely the author's opinion. Further, the author is a resident of the state of Washington and receives a pension from Boeing because of his earlier career at Hughes Helicopter Company on the Apache program which is now a part of Boeing Rotorcraft.
What is portfolio analysis?
Portfolio analysis has various methods which depend upon the purpose and product. One of the things which influence the market analysis is the strategy opted by the company: stability strategy, expansion Here are different methods for portfolio analysis in strategic management:
How many external factors are there in portfolio analysis?
There are eight external factors in this type of portfolio analysis in strategic management that affect the position of the life cycle and distinctive stages of the industry which are as follows :
What is harvest strategy?
Harvest Strategy. This Strategy is used to generate the cash flow in the short run despite the long term consequences. This is most suitable for the products in cash cows and question marks. It is also used in the case of dogs but to remove them from the market.
What is the Ansoff product market growth matrix?
The Ansoff product market growth matrix is portfolio analysis in strategic management which is also known as ‘product-market components’ is distributed into four segments with two dimensions i.e. existing and new markets & new and existing products.
Examples of Portfolio Analysis
Steps to Portfolio Analysis
- #1 – Understanding Investor Expectation and Market Characteristics – The first step before portfolio analysis is to bring in sync the investor expectation and the market in which such Assets will b...
- #2 – Defining an Asset Allocation and Deployment Strategy –This is a scientific process with subjective biases and it is imperative to define what type of assets the portfolio will invest w…
- #1 – Understanding Investor Expectation and Market Characteristics – The first step before portfolio analysis is to bring in sync the investor expectation and the market in which such Assets will b...
- #2 – Defining an Asset Allocation and Deployment Strategy –This is a scientific process with subjective biases and it is imperative to define what type of assets the portfolio will invest what tool...
- #3 – Evaluating Performance and Making Changes if Required – After a stated period as defined in the previous step portfolio performance will be analyzed and evaluated to determine whether the port...
Advantages
- It helps investors to assess the performance periodically and make changes to their Investment strategies if such analysis warrants.
- This helps in comparing not just portfolio against a benchmark for return perspective but also to understand the risk undertaken to earn such return which enables investors to derive the risk-adjus...
- It helps investors to assess the performance periodically and make changes to their Investment strategies if such analysis warrants.
- This helps in comparing not just portfolio against a benchmark for return perspective but also to understand the risk undertaken to earn such return which enables investors to derive the risk-adjus...
- It helps in realigning the investment strategies with the changing investment objective of the investor.
- It helps in separating underperformance and outperformance and accordingly, investments can be allocated.
Conclusion
- Portfolio analysis is an indispensable part of investment management and should be undertaken periodically to identify and improvise any deviation observed against the investment objective. Another important objective is that it intends to achieve is to identify the total risk undertaken to achieve the desired return and whether the risk is taken commensurate with the return achieved …
Recommended Articles
- This has been a guide to What is Portfolio Analysis and its Meaning. Here we discuss its tools along with examples, advantages and steps. You can learn more about portfolio management from the following articles – 1. Portfolio Investment 2. Portfolio Manager 3. Portfolio Diversification 4. Portfolio Rebalancing