Name of Student
Institution of Affiliation
The Advantages and disadvantages of Portfolio Analysis, as it pertain to the BCG Growth-Share Matrix.
Portfolio analysis refers to the evaluation of the entire holdings of the investments of an institution. Portfolio analysis is associated with some advantages that can help an institution. Firstly, portfolio development offers an opportunity for a company to evaluate each piece of investment individual and this offers important information for the company to set its objectives and allocate resources for each investment (Bhanu, 2014). Secondly, portfolio analysis allows an institution to use external resources during its analysis and this goes a long way in supplementing a company’s intuitive judgment (Bhanu, 2014). Thirdly, the analysis raises issues with cash flow hence can be used to determine the availability of funds for business expansion.
Portfolio analysis also posts some disadvantages. Firstly, it offers a challenge in determining the products or market segments. Secondly, its findings result in the provision of an illusion of scientific rigor and yet some subjective data are involved in this analysis.
The Contribution of Corporate Parenting to Effective Corporate Strategy and its relationship to SWOT Analysis
Corporate parenting is closely linked to corporate strategy. Corporate parents compete with one another in terms business ownership by pumping more resources into corporate business. By doing, this adds value to the business hence this act as a guiding principle for a corporate strategy.
SWOT analysis involves finding strengths, weaknesses, opportunities, and threats of an organization in order to create a competitive advantage that will enable an organization to make more money through a competitive advantage. Cooperate parenting also involves varies branch companies competing with one another but unlike in SWOT where businesses compete for profits, incorporate parents competes for ownership and not profits.
The Types of Diversification and Recommendation
Diversification strategy is a kind of strategy that is used when introducing a new product. The two types of strategies commonly used are as follows:
a) Concentric diversification strategies
This involves the introduction of a new product which is related to the existing product in the market.
b) Conglomerate Diversification Strategy
This involves the addition of a new product which is unrelated to the original product.
Given the opportunity to recommend a strategy for my Strategic Audit form, I will recommend the use of concentric diversification strategy since it does not require an overall of human labor or need for expertise that cannot be obtained from the existing human labor in the institution.
Types of Vertical Growth Strategy
There are three types of vertical growth strategy namely forward integration, backward integration and balanced integration (Ovidijus, 2013).
a) Forward integration
This is a strategy used by companies that participate in the marketing industry in which the company sales directly to consumers by bypassing distributors in a company (Ovidijus, 2013). The main role this strategy plays is that it bypasses the distributors who charge expensive or those that offer poor quality services to consumers.
b) Backward integration
This is a situation in which a company takes over its suppliers. This improves efficiency and avoids too expensive suppliers (Ovidijus, 2013). The strategy is a good when the industry is rapidly growing and there are many competitors for the same product.
c) Balanced IV integration
This is a combination of a forward integration and backward integration. It provides an avenue for the creation of a new market hence improved market share. In addition to that, the company operates at a lower cost due to reduced levels of transactions and the channel of transaction makes it cheaper to operate.
Ovidijus, J. (2013). Vertical Integration: Strategic Management Insight. Retrieved from https://www.strategicmanagementinsight.com/topics/vertical-integration.html
Bhanu, B. (2014). Portfolio Analysis. Retrieved from https://www.slideshare.net/bhargavibhanu10?utm_campaign=profiletracking&utm_medium=sssite&utm_source=ssslideview