1. Corporate Level Strategy

2. Value adding activities Establishing a clear strategic intent Focus Clarity to external stakeholders Clarity to BUs

3. Value adding activities Intervening within Business Units Regular monitoring of performance Action taken to improve business unit Challenge and develop the strategic ambitions of the BU. Coaching and training Synergies

4. Value adding activities Central Services and resources Investment Transferable managerial capabilities Providing expertise and services Knowledge creation and sharing

5. Value Destroying Activities Bureaucratic fog Financial safety net

6. Portfolio Managers Agent for financial markets Identifying and acquiring undervalued assets Divesting low performing SBUs quickly and good performers at a premium Small, low cost corporate staff

7. Synergy Managers Sharing activities/ resources to enhance competitive advantage of SBUs Identification of appropriate bases and benefits which outweigh costs Collaborative SBUs Corporate staff as Integrators

8. Parental Developers Central competences can be used to create value in SBUs SBUs not fulfilling their potential Portfolio is suited to parent’s expertise Effective structural & control linkage from parents to SBUs Incentives based on SBU performance

9. Managing the corporate Portfolio Balance of the portfolio eg in relation to its markets and the needs of the corporation The attractiveness of the Bus Degree of ‘ fit’ each BU has with each other

10. Portfolio Managers Synergy Managers and parental developers Portfolio Managers Synergy Managers Parental Developers LogicAgent for financial markets Achieve synergistic benefits Central competenc es used in SBUs LogicValue creation limited

11. Portfolio Managers Synergy Managers and parental developers Portfolio Managers Synergy Managers Parental Developers Strategic requirement Identifying undervalue d assets Sharing activities / resources SBU not fulfilling potential Strategic requirement Divesting low performers Identificati on of bases Parent can supplant SBU Strategic requirement Low level role BenefitsPortfolio suited

12. Portfolio Managers Synergy Managers and parental developers Portfolio Managers Synergy Managers Parental Developers Organization requirements Autonomo us SBUs Collaborati ve SBUs Corporate managers understand SBUs-feel Organization requirements Low cost staff SBU sharing Effective linkages Organization requirements Incentives on SBU Incentives corporate Incentives on SBU

13. Value adding potential of corporate rationales Value adding activity Portfolio Managers Synergy Managers Parental Developers Envisionin g Strategic Intent Yes External Image Yes Setting expectation Yes

14. Value adding potential of corporate rationales Value adding act Portfolio Managers Synergy Managers Parental developers Intervening Monitoring performance Yes Coaching and training Yes Challenging SBU Yes

15. Value adding potential of corporate rationales Value adding act Portfolio Managers Synergy Managers Parental developers Central Services InvestmentYes Scale advantage Yes Transferring capabilities Yes

16. Value adding potential of corporate rationales Value adding act Portfolio Managers Synergy Managers Parental developers Expertise Specialist expertise Yes Knowledge sharing Yes LeverageYes BrokeringYes

17. BCG Matrix Star – Hi Market Share, hi market growth Question Mark – Low Market share but hi market growth Cash Cow – Hi Market share but low market growth Dog – Lo Market share and lo market growth

18. Caution in the use of the BCG Exact meaning of ‘ Hi ‘ and ‘ Lo’ Analysis applicable to SBUs not products Question marks and stars are very demanding of creative resources Position of dogs often misunderstood Behavioral implications.

19. Directional policy matrix The directional policy matrix positions SBUs according to (a) how attractive the relevant markets is in which they are operating and (b) the competitive strength of the SBU in that market

20. Indicators of SBU Strength Market Share Sales force Marketing R&D Manufacturing Managerial competence Competitive position in terms image breadth of product line, customer service

21. Indicators of market attractiveness Market size Market growth rate Cyclicality Competitive structure Barriers to entry Technology Environmental issues

22. The parenting matrix Corporations should seek to build portfolios that fit well in their corporate centre parenting skills that are appropriate for its portfolio. Extent to which corporate parent has sufficient ‘ feel’ for it’s busineses Fit between the parenting opportunities of BUs and the capabilities of the parent

23. The parenting matrix ( contd ) Heartland business units are the ones where parent can add value without doing harm Ballast BUs are the ones where parent understands but can do little Value trap BUs are deceptive Alien Bus are clear misfits

24. Challenges Value or cost of the corporate parent Understanding value creation at BU Level Understanding value creation at the corporate level Sufficient feel Reviewing the portfolio

25. Roles in international portfolio Strategic Leaders – valuable resources located in countries crucial for competitive success Contributors – valuable resources in lesser significant countries but in a key role Implementers – help generate financial resources Black Hole- subsidiaries located in countries of crucial significance but with low level resources or capabilities