Question

What factors influence t0 create technological portfolio of any firm?​

Answer 1

Answer:

Portfolio analysis is a method of evaluating the effectiveness and value of various units in a company’s portfolio. It is a strategic tool that informs decisions such as resource allocation across business units or product lines, and whether you should invest more in, divest, or maintain certain units as they are. For example, Virgin’s portfolio includes an airline, record label and telecommunications business units to name a few. While portfolio analysis is a multi-business strategy, smaller firms can conduct a similar analysis on their individual product lines or services.

Well-known frameworks for portfolio analysis include:

Assessing the market growth rate and relative market share of each business unit (Boston matrix);

Assessing the attractiveness of the industry and each business unit’s competitive strength (McKinsey’s nine-box matrix); and

Assessing a business unit’s standalone value and the ability to extract synergies (market-activated corporate strategy framework).

These methods all consider a firm on a per business unit basis in which you analyse each unit for its value. The first two approaches both examine the attractiveness of the unit’s environment and its ability to compete in that environment. The third method combines these two considerations as a single measure of standalone value while also advising the importance of the parent company’s ability to extract synergies from the business unit.

However, all these factors only focus on maximising the economic value of the firm whereas other considerations such as culture or social benefit may override the need to maximise dollars. This article will flesh out these three factors – standalone value, synergies and other considerations.

Hope it helps you..