Strategic Comparisons

Abstract

In the previous chapter we outlined a number of possible business strategies, and in the concluding section suggested that the choice of individual strategy would depend upon the goals of the organisation, the extent to which the firm’s present aspirations were being achieved, the overall strength of the business, and the conditions in the product-market areas in which the company operates. In this chapter we shall systematise some of these considerations in order to indicate how management should choose the right strategy for an individual product area or strategic business unit. The same approach is also used to indicate how multi-product firms should structure their various product interests in the form of a portfolio. The purpose of these techniques is thus to match the joint assessment of the environmental and business resources analysis set out in Chapter 3 with the strategic possibilities discussed in Chapter 4.

In diversified business organizations one of the main functions of the management is to decide how money, materials and skilled manpower should be provided and allocated between different business sectors in order to ensure the survival and healthy growth of the whole. — S. J. Q. Robinson et al. ‘The Directional Policy Matrix’, Long Range Planning, June 1978, p. 8.