Strategic Planning Kit For Dummies®, 2nd Edition

Putting Your Portfolio Together (In the Market Attractiveness Framework)

After you've determined which products or services make money and which ones take money (see previous section), evaluate which ones to invest in by looking at how attractive the market is.

A widely used tool for conducting a portfolio analysis is the Market Attractiveness Framework, which provides a structure that works with your products and services as listed in the previous section. The framework looks at your portfolio based on the strengths of each product or service and its market attractiveness. Check out Figure 4-2 to see the framework in action. This example provides a good picture of where a company should invest to yield the biggest growth in the upper-right-hand part of the matrix.

Evaluating market attractiveness and business strength

The method of using the Market Attractiveness Framework is to fit your products or services in one of the three areas (as the example shown in Figure 4-2).

Figure 4-2: Use the Market Attractiveness Framework to determine your product portfolio in relation to market attractiveness and business strengths.

Determining what factors make a market attractive and what are product and/or service strengths can be difficult to pin down. A healthy dose of intuition is also helpful ...