THREE KEY ISSUES FACING THE CORPORATION…

THE FIRM’S ORIENTATION TOWARD GROWTH, STABILITY, AND RETRENCHMENT (Directional Strategy)

THE INDUSTRIES OR MARKETS IN WHICH THE FIRM COMPETES (Portfolio Strategy)

THE MANNER IN WHICH MANAGEMENT COORDINATES ACTIVITIES AND TRANSFERS RESOURCES AND CULTIVATES CAPABILITIES AMONG PRODUCT LINES AND BUSINESS UNITS (Parenting Strategy)

Corporate headquarters must play the “parent” as it deals with its various lines of business (children).

CONCENTRATION1. HORIZONTAL INTEGRATION

GEOGRAPHIC EXPANSION Local, Regional, National, Global

INCREASING THE RANGE OF PRODUCTS and/or SERVICES

2. VERTICAL INTEGRATION• BACKWARD

Long-Term ContractsQuasi-integrationTapered IntegrationFull Integration

• FORWARD

DIVERSIFICATION1. CONCENTRIC

Related

2. CONGLOMERATEUnrelated

DOMESTIC ENTRYINTERNAL DEVELOPMENT & EXPANSION

EXTERNAL ACQUISITIONS & MERGERS

STRATEGIC ALLIANCES & PARTNERSHIPSLicensing, Franchises, Joint Ventures

INTERNATIONAL ENTRYEXPORTINGLICENSINGFRANCHISINGJOINT VENTURESACQUISITIONSGREEN-FIELD DEVELOPMENTPRODUCTION SHARINGTURNKEY OPERATIONSMANAGEMENT CONTRACTS

COMPETITIVE POSITION

WEAK STRONG- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

- - - -

RAPID REFORMULATE HORIZONTAL HORIZ & VERTICAL INTEGRATIONINTEGRATION

VERTICAL DIVERSIFICATION INTEGRATION

SELL-OUT/DIVEST CONCENTRIC

DIVERSIFICATION

MARKET - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

GROWTH RATE DIVERSIFICATION INTERNATIONALEXPANSION

CAPTIVE FIRM/MERGEDIVERSIFICATION

ABANDONMENTSLOW JOINT VENTURE

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

DON’T DIVERSIFY UNLESS…

SYNERGY IS ACHIEVED

SHAREHOLDER VALUE IS BUILT

CONCENTRIC DIVERSIFICATION FINDING A SYNERGISTIC “FIT”

Marketing

Operations Management

MERGING THE FUNCTIONS

CONGLOMERATE DIVERSIFICATIONFIND FIRMS WHOSE ASSETS ARE UNDERVALUEDFIND FIRMS THAT ARE FINANCIALLY DISTRESSEDFIND FIRMS WITH BRIGHT PROSPECTS BUT ARE SHORT ON $$$

PROS…1--BUSINESS RISK IS SCATTERED OVER MANY INDUSTRIES

2--CAN INVEST CAPITAL IN WHATEVER OFFERS THE BEST PROFIT PROSPECTS

3--PROFITABILITY IS MORE STABLE BECAUSE HARD TIMES IN ONE INDUSTRY CAN BE PARTIALLY OFFSET BY GOOD TIMES IN ANOTHER

4--IF CORPORATE MANAGERS ARE GOOD AT SPOTTING BARGAIN-PRICED FIRMS WITH BIG UPSIDE PROFIT POTENTIAL, SHAREHOLDER WEALTH WILL BE ENHANCED

CONS…1--TOP MANAGEMENT COMPETENCE

Can they tell a good acquisition from a bad one? Can they select good managers to run each business?Do they know what to do if a business unit stumbles?

2--DIVERSIFICATION DOES NOTHING TO ENHANCE THE COMPETITIVE STRENGTH OF INDIVIDUAL BUSINESS UNITSEach business unit is on it ownNo corporate synergy can be achieved

3--ARE THE FIRM’S PROFITS MORE STABLE?Do the “up and down” cycles cancel out?

4--HOW MUCH DIVERSITY CAN THE FIRM MANAGE SUCCESSFULLY?How broad should our portfolio be?

ONE MAJOR CORE BUSINESS…With a modest diversified portfolio (1/3 or less)

NARROWLY DIVERSIFIED…With a few (2-5) related core business units…With a few (2-5) unrelated business units

BROADLY DIVERSIFIED…With many related business units…With many business units in mostly unrelated industries

A MULTI-BUSINESS FIRM…With several unrelated groups of related businesses

MAKE NEW ACQUISITIONSRelated or Unrelated?

DIVEST SOME BUSINESS UNITSPoor Performers?Poor Strategic “Fit?”

RESTRUCTURE THE WHOLE PORTFOLIO

NARROW THE DIVERSIFICATION BASE

BECOME A DIVERSIFIED MULTINATIONAL, MULTI-INDUSTRY COMPANY (DMNC)

PROFIT“Keep milking the cow, but don’t feed it”Artificially supporting profits by cutting costsKeeping up appearances that everything is still OKA temporary strategy for a worsening environment

PAUSEConsolidate after recent rapid growthA temporary strategy to “catch your breath”

PROCEED WITH CAUTIONEnvironment looks scary…wait to see what happens

NO-CHANGEA very predictable environment…nothing uncertain ever happensWhy tamper with success? What firms did before WalMart came…

OFTEN TRIGGERED BY…DISAPPOINTING PERFORMANCEECONOMIC DOWNTURNEXCESSIVE DEBTILL-CHOSEN ACQUISITIONS

TURNAROUNDHelp subsidiaries become profitable Belt-tightening and consolidation

CAPTIVE COMPANYGive up independence for security…sell mostly to one large customer “angel” Can scale back on some functions, like marketing

SELL-OUT/DIVESTSell the entire operation to someone as an ongoing businessDivest a healthy firm that doesn’t fit our portfolio…or a low-producing business

LIQUIDATIONThe last resort…no one wants to buy the entire businessThe assets are worth more than the business…so they’re sold piece by piece

THE BCG GROWTH-SHARE MATRIX (Boston Consulting Group)

DIMENSIONSIndustry Growth Rate

Compared to GDPRelative Market Share

Uses ratios instead of absolute market shares

CLASSIFICATIONSQuestion Marks (or Problem Children or Wildcats)StarsCowsDogs

ADVANTAGES & IMPLICATIONSIt is quantifiable and easy to useEasy to remember terms and their meaning when referring to business unitsAssumes large market shares => economies of scale => cost leadership Each business unit moves across the matrix in predictable ways over timeFocuses attention on cash flows and needs

TOO SIMPLISTIC—IT ONLY HAS A FOUR-CELL MATRIXWHERE DO “AVERAGE” BUSINESSES BELONG?

PREJUDICIAL CLASSIFICATION SCHEMEDOGS & PROBLEM CHILDREN v. STARS & COWS…VERY BIASED TERMSTHE TRENDS & MOVEMENTS OF THESE UNITS SEEM MORE IMPORTANT

IS HIGH INDUSTRY GROWTH ALWAYS GOOD?

DOES HIGH MARKET SHARE ALWAYS MEAN HIGH PROFITABILITY?FIRMS CAN LOSE MONEY WHILE HOLDING A LARGE MARKET SHARELOW-SHARE BUSINESSES CAN ALSO BE PROFITABLE

ONLY CONSIDERS RELATIONSHIP TO THE MARKET LEADER—WHILE OTHERS ARE IGNOREDWHAT ABOUT SMALL COMPETITORS WITH FAST-GROWING MARKET SHARES?

GROWTH RATE IS ONLY ONE ASPECT OF INDUSTRY ATTRACTIVENESS

MARKET SHARE IS ONLY ONE ASPECT OF OVERALL COMPETITIVE POSITION

RELATIVE MARKET SHARE

HIGH 1.0 LOW

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

HIGH STARS QUESTION MARKS

INDUSTRY 1.0 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

GROWTH RATECOWS DOGS

LOW - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

RELATIVE MARKET SHARE Your market share divided by largest rival’s share

INDUSTRY GROWTH RATEIndustry growth percentage compared to GDP

SIZE OF CIRCLESThe significance (revenues) of each SBU to the firm

TWO DIMENSIONS (McKinsey & Co)

Industry AttractivenessMARKET SIZE & GROWTH RATEINDUSTRY PROFITABILITYINTENSITY OF COMPETITIONBARRIERS TO ENTRY / EXITSEASONALITY / CYCLICALITYTECHNOLOGICAL & PRODUCT CONSIDERATIONSCAPITAL REQUIREMENTSEMERGING OPPORTUNITIES & THREATSSOCIAL, ENVIRONMENTAL, & POLITICAL FACTORSSTRATEGIC FIT WITH OTHER CURRENT LINES OF BUSINESS

Business Strength / (Competitive Position) RELATIVE MARKET SHARERELATIVE PRICE, QUALITY, & SERVICE v. RIVALSPROFIT MARGINS and COST POSITION v. RIVALSKNOWLEDGE OF CUSTOMERS & MARKETSTECHNOLOGICAL CAPABILITY & LEADERSHIPFINANCIAL & PHYSICAL RESOURCESCALIBER OF MANAGEMENT & STAFFCOMPETENCIES MATCH KEY SUCCESS FACTORS

BUSINESS STRENGTH / COMPETITIVE POSITION

STRONG AVERAGE WEAK- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -HIGH WINNER WINNER QUESTIONMARK

LONG-TERM - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

INDUSTRY AVERAGE WINNER AVERAGE LOSERATTRACTIVENESS BUSINESS

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -PROFIT LOSER LOSERLOW PRODUCER- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

INDIVIDUAL PRODUCT LINESIdentified by letter

SIZE OF EACH CIRCLERepresents the total revenues in the industry

PIE SLICESRepresents your share of that market

STRENGTHSUSES MORE COMPREHENSIVE MEASURES / VARIABLES IN ASSESSING INDUSTRY ATTRACTIVENESS AND BUSINESS STRENGTH / COMPETITIVE POSITION

DOESN’T LEAD TO AS SIMPLISTIC CONCLUSIONS AS THE BCG GRID

NINE CELL APPROACH ALLOWS FOR INTERMEDIATE RANKINGS BETWEEN HIGH/LOW AND STRONG/WEAK

STRESSES CHANNELING OF RESOURCES TO AREAS WITH THE GREATEST PROBABILITY OF ACHIEVING COMPETITIVE ADVANTAGE AND SUPERIOR PERFORMANCE

WEAKNESSESPROVIDES NO REAL GUIDANCE ON THE SPECIFICS OF WHAT STRATEGY TO FOLLOW … IT’S TOO GENERAL

CAN’T SPOT UNITS THAT ARE ABOUT TO BECOME WINNERS BECAUSE THEIR INDUSTRIES ARE ENTERING THE TAKEOFF STAGE

USE OF NUMERIC ESTIMATES SEEMS OBJECTIVE, BUT IS REALLY VERY SUBJECTIVE

SHOULD THE WEIGHTS & FACTORS USED TO ASSESS INDUSTRY ATTRACTIVENESS AND BUSINESS POSITION BE USED GENERICALLY, OR ADJUSTED DEPENDING ON THE INDUSTRY UNDER INVESTIGATION?

TWO DIMENSIONS (Charles Hofer & A. D. Little, Co)

Stage of Industry / Market EvolutionEARLY DEVELOPMENTRAPID GROWTH / TAKE-OFFSHAKE-OUTMATURITY / SATURATIONDECLINE / STAGNATION

Business Strength / (Competitive Position)

SAME DIMENSIONS AS USED IN THE GE BUSINESS SCREEN

ADVANTAGES

Can be used to identify and track developing winners

Illustrates how the firm’s businesses are distributed across the stages of industry evolution

BUSINESS STRENGTH / COMPETITIVE POSITION

STRONG AVERAGE WEAK

EARLY - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

DEVELOPMENT

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

STAGE OF RAPID GROWTH / TAKE-OFF

INDUSTRY / MARKET - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - SHAKE-OUT

EVOLUTION- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

MATURITY /SATURATION

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -DECLINE /STAGNATION

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

ONLY ONE DIMENSION IS DIFFERENT FROM THE GE BUSINESS SCREENExcept for the Stage of Market Evolution, this model is identical to the GE Business

Screen

STRENGTHSENCOURAGES TOP MANAGEMENT TO EVALUATE EACH LINE OF BUSINESS SEPARATELY, AND TO SET OBJECTIVES AND ALLOCATE RESOURCES TO EACH.

IT STIMULATES THE USE OF EXTERNALLY-ORIENTED DATA TO SUPPLEMENT MANAGEMENT’S JUDGMENT

RAISES THE ISSUE OF CASH FLOW AVAILABILITY FOR USE IN EXPANSION AND GROWTH

GRAPHICALLY COMMUNICATES THE MIX OF BUSINESSES THE FIRM HAS INVESTED IN

WEAKNESSESDEFINING PRODUCT / MARKET SEGMENTS IS DIFFICULT

IT SUGGESTS STANDARD STRATEGIES THAT CAN MISS OPPORTUNITIES OR BE IMPRACTICAL

PROVIDES AN ILLUSION OF SCIENTIFIC RIGOR, WHEN POSITIONS ARE REALLY BASED ON SUBJECTIVE JUDGMENTS

VALUE-LADEN TERMS (cow, dog) LEAD TO SIMPLISTIC STRATEGIES AND SELF-FULFILLING PROPHESIES

ITS NOT ALWAYS CLEAR WHAT MAKES AN INDUSTRY ATTRACTIVE OR WHERE A PRODUCT IS IN ITS LIFE CYCLE

NAIVELY FOLLOWING PORTFOLIO PRESCRIPTIONS MAY REDUCE PROFITS –DOGS CAN MAKE MONEY!

COMPARING INDUSTRY ATTRACTIVENESSATTRACTIVENESS OF EACH INDUSTRY IN THE PORTFOLIO

Is this a good industry for our organization to be in?

EACH INDUSTRY’S ATTRACTIVENESS RELATIVE TO THE OTHERSWhich industries are the most / least attractive?

ATTRACTIVENRSS OF ALL THE INDUSTRIES AS A GROUPHow appealing is the mix of industries? Is the portfolio a “good”

one?

TO DETERMINE INDUSTRY ATTRACTIVENESS

1--USE GE BUSINESS SCREEN METHODOLOGY

2--SUBJECTIVELY CLASSIFY EACH INDUSTRY FACTOR INTO ONE OF THREE CATEGORIES…

HIGHLY ATTRACTIVEAVERAGENOT ATTRACTIVE

INDUSTRY FACTOR CLASSIFIED AS

MARKET SIZE & GROWTH RATE AVERAGE

INDUSTRY PROFITABILITY ATTRACTIVE

INTENSITY OF COMPETITION UNATTRACTIVE

BARRIERS TO ENTRY/EXIT UNATTRACTIVE

SEASONALITY/CYCLICALITY AVERAGE

TECHNOLOGY & PRODUCT CONSIDERATIONS AVERAGE

CAPITAL REQUIREMENTS UNATTRACTIVE

EMERGING OPPORTUNITIES & THREATS AVERAGE

SOCIAL, REGULATORY, & POLITICAL FACTORS AVERAGE

STRATEGIC FIT WITH OTHER CURRENT LINES OF BUSINESS ATTRACTIVE

OVERALL EVALUATION = AVERAGE

ASSIGN A NUMBER TO EACH INDUSTRY FACTOR USING THE FOLLOWING SCHEME…

UNATTRACTIVE = 0, 1, 2, 3 AVERAGE = 4, 5, 6 ATTRACTIVE = 7, 8, 9, 10

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

INDUSTRY FACTOR ASSIGNED NUMBER

MARKET SIZE & GROWTH RATE 6INDUSTRY PROFITABILITY 9INTENSITY OF COMPETITION 2BARRIERS TO ENTRY/EXIT 3SEASONALITY/CYCLICALITY 6TECHNOLOGY & PRODUCT CONSIDERATIONS 5CAPITAL REQUIREMENTS 1EMERGING OPPORTUNITIES & THREATS 5SOCIAL, REGULATORY, & POLITICAL FACTORS 4STRATEGIC FIT WITH OTHER LINES OF BUSINESS 8

OVERALL EVALUATION = 49/10 = 4.9 = AVERAGE

1--ASSIGN WEIGHTS TO EACH INDUSTRY FACTOR (Must add up to 100%)

2--THEN ASSIGN NUMBERS TO EACH FACTOR USING THE FOLLOWING SCHEME…UNATTRACTIVE = 0 - 3 AVERAGE = 4 - 6 ATTRACTIVE = 7 - 10

3--MULTIPLY WEIGHTS BY NUMBERS TO DETERMINE THE WEIGHTED SCORE- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

- - - - - - - WEIGHT INDUSTRY FACTOR ASSIGNED NUMBER

.10 MARKET SIZE & GROWTH RATE 6

.10 INDUSTRY PROFITABILITY 9

.15 INTENSITY OF COMPETITION 2

.05 BARRIERS TO ENTRY/EXIT 3

.05 SEASONALITY/CYCLICALITY 6

.08 TECHNOLOGY & PRODUCT CONSIDERATIONS 5

.12 CAPITAL REQUIREMENTS 1

.10 EMERGING OPPORTUNITIES & THREATS 5

.10 SOCIAL, REGULATORY, & POLITICAL FACTORS 4

.15 STRATEGIC FIT WITH OTHER LINES OF BUSINESS 8

OVERALL EVALUATION = 4.87 = AVERAGE

USE THE FOLLOWING SCHEME TO CLASSIFY EACH BUSINESS STRENGTH FACTOR…

STRONGAVERAGEWEAK

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

BUSINESS STRENGTH FACTOR CLASSIFIED AS

OUR RELATIVE MARKET SHARE STRONGOUR RELATIVE PRICE v. RIVALS AVERAGEOUR QUALITY & SERVICE v. RIVALS AVERAGEOUR RELATIVE COST POSITION v. RIVALS STRONGOUR PROFIT MARGINS v. RIVALS STRONGKNOWLEDGE OF CUSTOMERS & MARKETS AVERAGETECHNOLOGICAL CAPABILITY / LEADERSHIP WEAKFINANCIAL & PHYSICAL RESOURCES AVERAGECALIBER OF MANAGEMENT & STAFF STRONGCOMPETENCIES MATCH KEY SUCCESS FACTORS AVERAGE

OVERALL EVALUATION = AVERAGE to STRONG

ASSIGN NUMBERS TO EACH BUSINESS STRENGTH FACTOR …USE THE FOLLOWING…

WEAK = 0, 1, 2, 3 AVERAGE = 4, 5, 6 STRONG = 7, 8, 9, 10

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

INDUSTRY FACTOR ASSIGNED NUMBER

RELATIVE MARKET SHARE 7RELATIVE PRICE v. RIVALS 5QUALITY & SERVICE v. RIVALS 6RELATIVE COST POSITION v. RIVALS 8PROFIT MARGINS v. RIVALS 8KNOWLEDGE OF CUSTOMERS & MARKETS 5TECHNOLOGICAL CAPABILITY & LEADERSHIP 2FINANCIAL & PHYSICAL RESOURCES 4CALIBER OF MANAGEMENT & STAFF 8COMPETENCIES MATCH KEY SUCCESS FACTORS 6

OVERALL EVALUATION = 59/10 = 5.9 = AVERAGE

1--ASSIGN WEIGHTS TO EACH COMPETITIVE FACTOR (Must add up to 100%)

2--THEN ASSIGN NUMBERS TO EACH FACTOR USING THE FOLLOWING SCHEME…WEAK = (0 – 3) AVERAGE = (4 – 6) STRONG = (7 – 10)

3--MULTIPLY WEIGHTS BY NUMBERS TO DETERMINE THE WEIGHTED SCORE- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

- - - - - - - WEIGHT COMPETITIVE BUSINESS STRENGTH ASSIGNED NUMBER

.08 RELATIVE MARKET SHARE 7

.08 RELATIVE PRICE v. RIVALS 5

.15 QUALITY & SERVICE v. RIVALS 6

.12 RELATIVE COST POSTION v. RIVALS 8

.06 PROFIT MARGINS v. RIVALS 8

.15 KNOWLEDGE OF CUSTOMERS & MARKETS 5

.05 TECHNOLOGICAL CAPABILITY / LEADERSHIP 2

.10 FINANCIAL & PHYSICAL RESOURCES 4

.06 CALIBER OF MANAGEMENT & STAFF 8

.15 COMPETENCIES MATCH KEY SUCCESS FACTORS 6

OVERALL EVALUATION = 5.93 = AVERAGE

WHICH BUSINESS UNITS HAVE THE BEST/WORST PERFORMANCE?

ASSESS THE TRENDS RE:Sales GrowthProfit GrowthContribution to Company EarningsReturn on Capital Invested in the Business (ROA)Cash Flow Generated

STRATEGIC FIT ANALYSISSTRATEGIC ATTRACTIVENESS

Does this business have cost-sharing or skills-transfer opportunities?FINANCIAL ATTRACTIVENESS

Does this business contribute to corporate performance objectives?

RANK THE BUSINESS UNITS ON INVESTMENT PRIORITYWhich units should get the highest priority regarding financial support?

UNIT A UNIT B UNIT C UNIT D

SALES GROWTH .018 .068 .102 .071

GROWTH IN PROFITS .032 .062 .103 .044CONTRIBUTION TO CORP EARNINGS (Omit 000s) $ 70 $554 $ 29 $237RETURN ON ASSETS .072 .124 .088 .096GENERATED CASH FLOWS $234 $611 $ 28 $342

(Omit 000s)

STRATEGICALLY ATTRACTIVE No Yes Yes No

FINANCIALLY ATTRACTIVE Yes Yes No Yes

INVESTMENT PRIORITY 4 1 2 3

1. DOES THE PORTFOLIO HAVE ENOUGH BUSINESSES IN ATTRACTIVE INDUSTRIES?

2. DOES THE PORTFOLIO CONTAIN TOO MANY MARGINAL BUSINESSES OR QUESTION MARKS?

3. DOES THE CORPORATION HAVE ENOUGH CASH COWS TO FINANCE THE STARS AND EMERGING WINNERS?

4. DO THE CORE BUSINESSES GENERATE DEPENDABLE PROFITS OR CASH FLOWS?

5. IS THE PORTFOLIO VULNERABLE TO SEASONAL OR RECESSIONARY INFLUENCES?

6. DOES THE PORTFOLIO CONTAIN BUSINESSES THAT THE CORPORATION DOESN’T NEED TO BE IN?

7. IS THE CORPORATION BURDENED WITH TOO MANY BUSINESSES IN AVERAGE-TO-WEAK COMPETITIVE POSITIONS?

8. DOES THE MAKEUP OF THE PORTFOLIO PUT THE CORPORATION IN A GOOD POSITION FOR THE FUTURE?

1. IDENTIFY THE PRESENT CORPORATE STRATEGY

2. CONSTRUCT BUSINESS PORTFOLIO MATRICES

3. PROFILE THE INDUSTRY AND COMPETITIVE ENVIRONMENT OF EACH BUSINESS UNIT

4. EVALUATE THE COMPETITIVE STRENGTH OF EACH INDIVIDUAL BUSINESS

5. COMPARE PERFORMANCE RECORDS OF EACH BUSINESS UNIT

6. HOW WELL DOES EACH BUSINESS UNIT “FIT” WITH CURRENT CORPORATE STRATEGY?

7. RANK THE UNITS FROM HIGHEST TO LOWEST IN INVESTMENT PRIORITY

8. CRAFT A SERIES OF MOVES TO IMPROVE OVERALL CORPORATE PERFORMANCE