Guideline 8 Understanding a portfolio of products and markets
You cannot be all things to all people. A deep understanding of portfolio analysis will enable you
to set appropriate objectives and allocate resources effectively. Portfolio logic arrays competitive
position against market attractiveness in a matrix form.HighHighLowMarket
attractivenessCompetitive
positionBox 1 Maintain and manage for sustained earnings
Box 2 Invest and build for growth
Box 3 Selectively invest
Box 4 Manage for cashLow1
2 3
4
106 The Marketing Book
6 Understanding marketing segmentation
Guideline 6 looks somewhat technical and even
esoteric, at first sight. None the less, market
segmentation is one of the key sources of
commercial success and needs to be taken
seriously by all organizations, as the days of the
easy marketability of products and services
have long since disappeared for all but a lucky
few.
The ability to recognize groups of custom-
ers who share the same, or similar, needs has
always come much easier to SMEs than to large
organizations. The secret of success, of course,
is to change the offer in accordance with
changing needs and not to offer exactly the
same product or service to everyone – the most
frequent product-oriented mistake of large
organizations. Closely connected with this is
the next point.
7 Understanding the dynamics of product/market
evolution
Although at first sight Guideline 7 looks as if it
applies principally to large companies, few will
need reminding of the short-lived nature of
many retailing concepts, such as the boutiques
of the late 1980s. Those who clung doggedly
onto a concept that had had its day lived to
regret it.
Few organizations today will need to be
reminded of the transitory nature of their
business success.8 Understanding a portfolio of products and
markets
Guideline 8 suggests plotting either products/
services, or markets (or, in some cases, custom-
ers) on a vertical axis in descending order of
market attractiveness. (The potential of each for