Strategic portfolio management is an essential condition of sustainable growth. Portfolio decisions must have a solid quantitative foundation and must be based on the principles of value management. We can draw on many years' experience in designing and implementing value-based portfolio management strategies.
If one had to reduce the tasks of top management to the very bare essentials, strategic portfolio management would undoubtedly be one of them. This is true in all industries and with all business models. Strategic portfolio management creates lasting value and growth and increases shareholder value.
Managers can activate three levers to respond to changes in the marketplace and competitive environment, or to actively influence that environment. They can either optimize their existing portfolio of businesses, look for growth opportunities in new areas of business, or adjust (i.e. trim) their portfolio.
Successful portfolio management must be more than just well thought through; and it must do more than just deliver durable results and be straightforward to implement. Portfolio decisions must have a solid quantitative foundation and must be based on the principles of value management.
Roland Berger Strategy Consultants' portfolio strategy therefore comprises five action dimensions:
- Define the orientation of the portfolio and develop an overall concept
- Optimize existing lines of business
- Exploit areas of growth
- Refine and improve the organization
- Define the value arithmetic and calculate the value of the portfolio