Question

What are the challenges in managing a portfolio of companies? Identify an organization that has been consistently successful. What critical success factors have they emphasized?

Answer 1

There are a number of variables which can be seen in the portfolio of any organization. Among these are the internal and external environment, competitive advantages, and disadvantages, revenue generation opportunities, costs and marketing situations Strategic planning and analysis can be made quite simple with the help of this method. But there are a number of limitations associated with this method. The different models which can be employed are BCG's Strategic Environments Matrix, BCG Growth-Share Matrix, and Industry Attractiveness-Business Strength Matrix

When a lesser considerations are given to the value chain, precise matrices which are quite difficult to create, lesser options in the strategic planning, fewer consideration of capitalists as fund sources , the unpractical assumptions related to the customers and earning chances, increasing competition in the market, it will cause some kind of restrictions on the strategic planning and result analysis.

Toyota can be seen as an organization which is able to manage its portfolio quite successfully. The company performs a careful analysis of short term and long term strategic plan in order to support some of the vital decisions. The company performs a comprehensive analysis of industrial factors and challenges rather than leaving them unattained. In order to get the best performance form the manpower, the management uses some level of formality in the standardization of activities to have the greater productivity level. BCG's Strategic Environment Matrix is used by Toyota to differentiate itself from Lexus cars. Toyota has a relatively lower degree of advantages in comparison to Lexus cars