Strategic Management for Portfolio Analysis- myassignmenthelp.com

Question: Discuss about theStrategic Management for Portfolio Analysis. Answer: Introduction Strategic management can be defined as the process in which different plans are developed and implemented with an objective to carry out the smooth flow of business operations and accomplish different goals(Bettis, Ethiraj, Gambardella, Helfat, Mitchell, 2016). The present reports explain the key advantages and disadvantages linked to portfolio analysis. The role of corporate parenting in enhancing a firms overall corporate strategy is also reflected in this report. Main Body Describe the Advantages and Disadvantages of Portfolio Analysis Portfolio analysis can be termed as an efficient process which allows businesses to carry out the systematic analysis of their services and products offered. Furthermore, portfolio analysis is conducted by companies with an objective to identify the performance of their investment portfolio with regards to areas such as risks and rate of return. The key advantage of carrying out portfolio analysis is that it supports businesses in managing risk and return efficiently. In addition to this, it assists corporations to conduct an adequate evaluation of their different business unit and helps in accurately allocating resources. On the other side of this, it can be critically argued that the process encourages companies to carry out the separation of their products, services, and business units and this is very time consuming and complicated process(Hill, Jones, Schilling, 2014). Another disadvantage of portfolio analysis is that the analysis depends entirely on forecasting and it is not necessary that prediction provides accurate and correct information every time. Companies can make use of portfolio analysis to identify the current position of their products in BCG matrix. For example, it can render organizations with information that some products lie in the category of dogs which indicates low market share and low growth rate of products. Based on the information collected, companies can take corrective measures through portfolio analysis. Explain how Corporate Parenting can Contribute to an Effective Corporate Strategy Corporate parenting can be termed as the process in which the corporate headquarter of a company takes care of different business sub units. It can be expressed that corporate parenting directly contributes to development and implementation of the effective corporate strategy. For example, SWOT analysis of different business units can be carried out by corporate headquarters of the company. The analysis is considered as a crucial and integral part of corporate parenting and helps companies to identify the key strengths and weakness of every unit. Furthermore, the analysis also discloses the opportunities and threats present in front of units(Bettis, Gambardella, Helfat, Mitchell, 2014). Based on the information collected, Corporate headquarter can develop an effective corporate strategy which can contribute to long term growth and success of every unit. Strategies can be drawn up by corporate headquarter to overcome weakness and deal with critical threats. Describe the Two Types of Diversification Strategies Related and unrelated are the two different types of diversification strategy which can be taken into consideration by the strategic audit firm. According to the related diversification strategy, the company will be required to introduce the new line of existing products and services within existing markets. It can be evaluated that the core benefit of related diversification strategy is that here the risk associated with products failure is quite small. The company offers new range of existing products in the market which it is already aware of. Unrelated diversification is the strategy in which company add on the new product line and enter a market which is entirely new(Menz, Kunisch, Collis, 2015). It can be evaluated that the use of unrelated diversification strategy will support the company to enhance its market share by acquiring new customers. However, it can be critically argued that effective management of all resources and proper planning is essential for the business to achieve success through unrelated diversification strategy. The Roles each of the four Vertical Growth Integration Strategies Forward integration strategy According to this vertical growth strategy, companies rely heavily on different intermediaries to sell its products and services. The intermediaries are generally in the form of retailers and distributors. In the overall corporate strategy of the firm, Forward integration strategy plays a vital role in situations where companys existing system of distribution is expensive and not reliable. Backward integration strategy It can play a significant role in enhancing the overall corporate strategy of a business enterprise in situations where existing suppliers of the company are not sufficient enough. Furthermore, the approach is also beneficial in conditions where the total number of vendors is very less(Hollensen, 2015). Taper integration It can be termed as the strategy in which half of the production is carried out by the company, and the remaining is being bought from suppliers. Taper integration can enhance the corporate strategy by providing the opportunity to lower down the operational cost. The rationale behind this is that where companies make use of suppliers resources for production. Quasi-integration - As per this strategy, organizations purchase outlets of its goods to carry out the smooth flow of all operations(Morschett, Schramm-Klein, Zentes, 2015). Quasi-integration can enhance the corporate strategy of the company by allowing it better access to the existing markets. Conclusion It can be concluded that portfolio analysis has different advantages and disadvantages which need to be taken care by companies. Furthermore, corporate parenting and vertical growth strategy can directly contribute to the enhancement of the corporate strategy. References Bettis, R. A., Ethiraj, S., Gambardella, A., Helfat, C., Mitchell, W. (2016). Creating repeatable cumulative knowledge in strategic management. Strategic Management Journal , 257-261. Bettis, R., Gambardella, A., Helfat, C., Mitchell, W. (2014). Quantitative empirical analysis in strategic management. . Strategic Management Journal , 949-953. Hill, C. W., Jones, G. R., Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Boston: Cengage Learning. Hollensen, S. (2015). Marketing management: A relationship approach. New York City: Pearson Education. Menz, M., Kunisch, S., Collis, D. J. (2015). The corporate headquarters in the contemporary corporation: Advancing a multimarket firm perspective. . The Academy of Management Annals , 633-714. Morschett, D., Schramm-Klein, H., Zentes, J. (2015). Strategic international management. New York City: Springer.