Why is Portfolio Analysis important in marketing?

The Portfolio Analysis is an aid that is used by Marketeers to take decisions over product-market combinations (portfolio). It is an essential component of the Internal Analysis where the strengths and weaknesses of a company are researched.

Why is it important to analyze a portfolio?

Careful portfolio analysis is necessary to ensure that you have the correct asset allocation according to your objectives and risk tolerance. Proper portfolio analysis is important to long-term financial success because each asset class within a portfolio comes with a different type of short and long term risk.

Why do companies do portfolio analysis?

The analysis of the business portfolio helps a company to decide to whether its businesses should receive more or less investment. Further the portfolio also helps to determine and develop growth strategies for introducing new products and earning new businesses.

What is the purpose of a portfolio analysis in marketing strategy what type of strategic decisions are made?

Portfolio analysis in strategic management involves analyzing every aspect of product mix to identify and evaluate all products or service groups offered by the company on the market, to prepare the detailed strategies for each part of the product mix to improve the growth rate.

What is a portfolio in marketing?

A product portfolio is the collection of all the products or services offered by a company. Product portfolio analysis can provide nuanced views on a stock type, company growth prospects, profit margin drivers, income contributions, market leadership, and operational risk.

What is portfolio analysis in marketing differentiate it from business portfolio?

A business portfolio is a company’s set of investments, holdings, products, businesses and brands. A product portfolio is the product’s mix of market segments. Marketing managers attempt to make a product appeal to specific groups of people, called segments. Both types of portfolios help companies grow financially.

What is the meaning of business portfolio in marketing?

Definition: A business portfolio is a group of products, services, and business units that conform a given company and allows it to pursue its strategic goals. This portfolio can also be defined as the set of available assets that the company posses to develop its mission and reach its vision.

What is portfolio planning and why is it useful?

Portfolio planning can be a useful tool. Portfolio planning is a process that helps executives assess their firms’ prospects for success within each of its industries, offers suggestions about what to do within each industry, and provides ideas for how to allocate resources across industries.

What is the main basis of portfolio analysis?

Portfolio Analysis is one of the areas of investment management that enables market participants to analyze and assess the performance of a portfolio (equities, bonds, alternative investments etc) with the objective of measuring performance on a relative and absolute basis along with its associated risks.

What does a portfolio marketing manager do?

About You and this Role The Portfolio Marketing Manager must have an understanding of the product and/or solution’s buying audiences and their needs and often acts as a subject matter expert (SME) who transfers knowledge about markets, buyers, and product across marketing and sales functions.

What is the importance of product portfolio?

The goal of product portfolio management is to ensure that the company’s investment in products meets objectives. In order to do this, portfolio management must understand the needs and contributions of the products and allocate resources across product lines and SBUs to optimize their market performance.

What purpose is served by Portfolio Analysis in the strategic marketing planning process?

Portfolio analysis in strategic management allows to answer key questions how to shape the present and future business portfolio (of product or services) in order to reduce the risk of functioning in a changing environment, and increase the effects of the implemented strategy.

What is portfolio analysis in marketing?

– THE Marketing Study Guide What is portfolio analysis in marketing? In marketing strategy subjects, you often learn about different strategic models – some of these will include portfolio models, or portfolio matrixes, or portfolio analyses – which are all interchangeable terms for the same concept. What is a business portfolio?

How should a business analyse its current business portfolio?

Firstly, the business must analyse its current business portfolio to determine which businesses (SBUs, see below) should receive more, less, or no investment. This is significantly influenced by the life cycle stage the products are in. Does the product reach the end of its life cycle end soon?

How should the firm shape its future portfolio?

Secondly, the firm must shape its future portfolio, based on the analysis of the current portfolio, by developing strategies for growth and downsizing. For the portfolio analysis, the Boston Growth-Share Matrix should be applied. It assists in evaluating the businesses that make up the company and the attention they should receive.

How is portfolio analysis linked with product life cycle?

Portfolio Analysis is strongly linked with the Product Life Cycle! When the firm has classified the SBUs, it can determine the roles each SBU will play in the future, in order to shape the future business portfolio. The company can choose from four strategies for each business unit.