Thematic Analysis of a Small Business Portfolio Analysis
Business portfolio analysis is basically the process of analyzing a business's overall competitive position and industry performance relative to its peer group. Used as part of strategic planning to maximize investment activitie, this analysis plays a crucial role in defining an organization's long-term viability and prospects. It is also used for identifying companies that may be suitable for acquiring or joint ventures with companies in your industry. In addition, it serves as a tool to gauge organizational competency.
business portfolio analysis overall and short-term financial performance relative to their peer group and other similar organizations can help you determine the strengths and weaknesses of your company. This enables you to identify areas that require immediate attention and focus in order to improve your competitive advantage. With the aid of a competent business portfolio analyst, you can review your portfolio on a regular basis. In doing so, you will be able to observe changes in your portfolio that mirror changes in your company's overall competitive environment and industry profile. This allows you to take necessary steps to address competitive challenges head-on.
In addition, business portfolio analysis helps you identify specific areas where you need improvements. For instance, if your competitive position is largely dependent on your technological superiority, your analysis can highlight ways to improve this competitive advantage through the adoption of latest technologies. You can also identify areas where you can strengthen your brand through effective marketing strategies, increased corporate social responsibility, or solid strategic planning.
In general, business owners tend to adopt one of several strategies when they want to excel at competitive analysis. Usually, they adopt a defensive strategy that focuses on developing market share without necessarily focusing on expanding market reach. This can create a problem as market reach can sometimes be a more relevant metric in determining companies' actual ROI than overall revenue. In addition, defensive business portfolio analysis strategies can reduce the amount of time you spend on developing a competitive strategic plan. A better approach would be to develop a comprehensive strategic plan that includes not only market share but also strategy and tactics to increase customer loyalty and increase business units. In this case, identifying weaknesses in the strategic plan would more accurately pinpoint the areas where an owner would want to make changes.
Finally, an owner might want to develop a strategic plan with a broader focus. While it is important to build a diversified portfolio of business units, identifying a few key competitors would still likely serve to significantly boost the ROI. The trick is identifying one key competitor that has the potential to be a large market leader. For instance, if a company markets mostly to small-business owners, then a competitor that targets mid-size to larger sized business units would most likely have an impact on overall revenue growth. By identifying a competitor with a broader market share, a small-business owners can develop a plan that would generate positive results over a much longer term basis.
The third step in a five-stage process is to compare the strengths and weaknesses of the strategies in the strategic plans. To do this, a business portfolio analyst would typically make a two-step matrix that compares the strength of a strategy against its weaknesses. The matrix may also represent a single-step matrix that compares the strengths of a portfolio of strategies against one or more vertical axis categories. A two-step matrix can provide the owner with a clearer picture of how their strategy fits into the overall landscape of their portfolio and whether it provides a competitive advantage versus their competitors.
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