Is an approach to business strategy that was influential in the 1980s and 1990s. At its core is the belief that strategy is concerned with deciding the mix of activities and range of product markets in which the company invests. Portfolio planning is based on the assumption that the enterprise consists of a series of separate companies that are controlled from the centre through measures of financial performance. The head office, therefore, acts like an investment banker rather than a strategic planner of company operations. Within a portfolio of companies, it is suggested that there should be a mix of types, including ‘cash cows’, mature businesses that generate revenue, together with start-up and innovative enterprises that may become the cash cows of the future.
Subjects: Human Resource Management.