Portfolio Planning Model


Portfolio models plot the positions of Strategic Business Units (SBU) or products of a company depending on two groups of factors: the attractiveness of the market they are competing in and their relative strength in relation to their competitors.

This portfolio planning matrix was modeled after the one originally developed by General Electric and McKinsey Corporation. The individual factors defining the first two dimensions have been weighted according to commonly assigned values. However, these weights may vary over time and for particular markets. They can be adjusted. The third dimension – expressed by the relative size of bubbles – reflects the importance of SBUs.
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