The enterprise which it produces & sells the product of multi types, group of businesses has done, from strategic viewpoint distribution of the management resource most efficient business analysis management technique in order to decide the product business mutual combination (portfolio) which becomes effective.
Generally, from two points of view of external variable (growth characteristic of market and industry, degree of charm) and internal variable (predominance of the respective company, competitiveness potential capacity), profitability, growth characteristic and cash flow etc. are appraised in every product and business, the enlargement, maintenance, reduction and withdrawal are decided.
PPM while the enormous conglomerate enterprise of GE (general electric) and the like advances business reorganization in the United States after the sixties middle, designates those which the Boston consulting group (BCG) lectures on the sixties end as beginning. With the BCG model, growth rate of the market to set the matrix (growth - share matrix) of 4 quadrants which take the relative market share of competitive other companies in the horizontal shaft to vertical axis, here each product each business (SBU: The strategic business unit) the portfolio of the product business in the whole company by the fact that it plots is grasped, strategic decision making is done.
High
?
Star product
(Star)
Growth expectation -> maintenance Problem child
(Question mark and problem child)
Competition intensification -> rearing
The wood where the gold becomes
(Cash cow)
Maturity field stable profit -> harvesting Being defeated dog
(Dogs)
Stagnation atrophy -> withdrawal
City
Place
Forming
Length
Ratio
?
It is low
Large <- Relative market share -> Small
Growth - share matrix
With this model, as for "the wood where the gold becomes" without big additional investment the business which produces cash flow, as for the "star product" the business whose it is necessary to keep continuing the investment which is adjusted to the growth of the market, as for the "problem child" it is the business where investment is insufficient vis-a-vis the growth of the market and the business whose withdrawal is necessary, "it is defeated and the dog" thinks the business where promising future should withdraw low basically, whether positive additional investment, "the wooden empty the gold becomes" throws the profit which is obtained to the "problem child", raises in the "star product" the investment strategy that Becomes principle.
PPM being simple, being simple, is the convenient instrument, but when it is too simple from appearance beginning, there was also criticism. Actually other evaluation method should be jointly used to strategic plan.
The growth of BCG - the share matrix (BCG matrix) as strategic management of the conglomerate enterprise which has group of businesses in participation is promoted, became the opportunity where the analysis by the various appraisal axes is developed. As an other technique, the business screen ( which GE and ?????? developed jointly is famous.
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