Strategic business-Planning grid
Management’s first step is to identify the key businesses making up the company. These are strategic business units. A strategic business unit (SBC) is a unit of the company that has a separate mission and objectives, and which can be planned independently from other company businesses. An SBU can be a company division, a product line within a division, or sometimes a single product or brand. The next step in business portfolio analysis calls for management to assess the attractiveness of its various SBUs and decide how much support each deserves. In some companies, this occurs informally. Management looks at the company’s collection of businesses or products and uses judgment to decide how much each SBU should contribute and receive. Other companies use formal portfolio-planning methods. The purpose of strategic planning is to find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment. So most standard portfolio-analysis methods evaluate SBUs on two important dimensions: the attractiveness of the SBU’s market or industry; and the strength of the SBU’s position in that market or industry. The best-known portfolio-planning methods are from the Boston Consulting Group, a leading management consulting firm, and General Electric and Shell.
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Strategic business-Planning grid
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