A New Approach to Portfolio Matrix Analysis for Strategic...

A NEW APPROACH TO PORTFOLIO MATRIX ANALYSIS FOR STRATEGIC MARKETING PLANNING 1 2 Vladimir Dobrić , Boris DelibaÃ… ¡ić Faculty of organizational science, vdobric@fon.rs 2 Faculty of organizational science, delibasic.boris@fon.rs 1 Abstract: Portfolio matrix is probably the most important tool for strategic marketing planning, especially in the strategy selection stage. Position of the organization in the portfolio matrix and it’s corresponding marketing strategy depends on the aggregation of values of relevant strategic factors. Traditional approach to portfolio matrix analysis uses averaging function as an aggregation operator. This approach is very limited in realistic business environment characterized by complex†¦show more content†¦It is clear that the use of weighted arithmetic mean as an aggregation operator can’t express all the possible interactions between strategic factors that exist in a realistic business environment. This explains why the traditional approach to portfolio matrix analysis is highly limited, with the inherited weaknesses that can’t be overcome without substantial modification. Therefore, under previous conditions, it is obvious that a new approach to p ortfolio matrix analysis is needed. This new approach must take in consideration all the possible forms of interactions between strategic factors that can occur in a realistic business environment. These interactions can be expressed with a logical aggregation operator, so a new approach to portfolio matrix analysis can be based on this operator. W eighted arithmetic mean and other known aggregation operators are just, as we will see in the following sections, special cases of logical aggregation operator. 2. THE MCDONALD’S DIRECTIONAL POLICY MATRIX (DPM) Although the DPM, like other models of portfolio matrices, attempts to define an organization’s strategic position and strategy alternatives, this objective can’t be met without considering what is meant by the term „organizationâ€Å". The accepted level at which an organization can be analysed using the DPM is that of the „strategic business unitâ€Å". The most commonShow MoreRelatedStrategic Business Unit ( Sbu )1439 Words   |  6 PagesStrategic business unit (SBU) Introduction: Strategic business unit (SBU) can be described as specialized subsystem within an organization working independently as a separate company. The concept of SBU was first put into practice by U.S. Company named General Electric. SBU are usually a completely independent small business entity having higher functional as well as decision autonomy. Depending on the level of autonomy SBUs may sometimes need to work closely with parent company. 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