1. The Portfolio Concept
The portfolio problem in financial investment management consists of determining the “optimal” portfolio of stocks and bonds. Steps involved in the procedure include:
The Tradeoff between risk and return (or market share, growth). Risk, market share, and growth are the objective and /or portfolio dimensions.
Cell/Item evaluation in terms of the objectives specified above.
The allocation (recommendation) of resources among products.
A time dimension is implied

2. George Day – “Diagnosing the Product Portfolio”:
Strategic Considerations ---- ex. 1
key points: the recent position of each product
(defined by relative share and market growth rate)
during a representative time period.
Future Position
Continuation of present A Forecast of a change
Strategy in strategy scenario analysis

3. Issues:
Other factors influence profitability
external forces (e.g. government, economy) impact diversification even into “dogs” --- e.g. backwards integration
can strategies be implemented – cash flow
which market share should be measured
product/ market definition
market served vs. total market