Business Portfolio Analysis
The business portfolio analysis represents an analytical approach by means of which managers have the possibility to view the corporation as a set of strategic business units that must be managed in a profitable way. Also, by taking into account features specific to the area in which the company operates, by taking into account the competitive advantage and the modalities of earmarking financial resources thereof, the business portfolio analysis provides managers the opportunity to approach companies from a different point of view and to pay increased attention to all activities that need to be undertaken.
A significant contribution in the field of strategic business portfolio analysis specific to a company belongs to Charles W. Hofer. Over time, he undertook a series of research studies showing that the stage of the life cycle of a product represents a factor that influences to a greater or smaller extent the success of a strategy. Also, he was unsatisfied with the G.E. method, developed by the McKinsey & Company consultancy company and by the General Electric company, which did not stated clearly the position of strategic business units which have recently penetrated the market and which presented a high development potential in the future. Consequently, he proposed a new assessment matrix of business portfolio of the
company, organised into 15 quadrants. The specialty literature mentions in under the name of “Hofer Matrix” or "Product/Market Evolution Matrix” and is quite similar to the Arthur D. Little matrix