ABSTRACT
This chapter contains company position/industry attractiveness screen; the principles on which it is based; underlying assumptions; guidance on application, and relevant issues; and related models. Since resources are limited their allocation should be based on a combination of industry attractiveness and the relative strengths of different business units in a diversified organization. Industry attractiveness includes market growth, size, and profitability and price policies. Business unit strengths include size, market share and technological standing. Growth through investment is a central objective. Remove cash from the business unit and invest elsewhere. Business units should be defined very carefully because definitions shape market perceptions, are influenced by administration and resource considerations and must be responsive to changes in markets, competition and technology. Portfolio planning tends to centralize the strategic process. If the devolution of strategy setting is an objective, corporate and unit managements must be permitted to negotiate about cash flow and strategic objectives.
