Overview

During the 1970s there were many major contributions to corporate planning. One of the most significant was undoubtedly strategic portfolio analysis. This technique, which can be found in many different variations, helped to satisfy the emerging need for centralised decisions on key strategic issues in multinational corporations. Portfolio analysis provided a means of comparing numerous business activities in relation to each other, establishing priorities and deciding between winners and losers.

The original work is accredited to General Electric whose concept included dividing activities into strategic business units with like characteristics, related to the life cycles of the products. 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. This life-cycle difference could result in two strategic business units, instead of one on a more traditional product grouping.

The Boston Consulting Group deserve much of the credit for developing and popularising the technique. It is this organisation's 2 2 matrix with its evocative terminology which has...