Strategic Marketing: Planning and Control, Third Edition

There are also wider criticisms of portfolio models in general:

❍ They are based on an analysis of current areas of business and are

therefore an inappropriate tool to employ in tackling the issue of

new business development.

❍ They placed too much emphasis on growth, either through enter-

ing high growth markets, or through gaining high market share.

Whereas there are virtues to entering stable markets that have

lower growth rates.

❍ These models can require information that can be difficult to obtain

and are complex and time consuming to successfully execute.

In response to these criticisms, it should be pointed out that much of

the information required for portfolio analysis, organisations should

be collecting anyway to support strategic decisions.

The reality is also that all models have weaknesses; their very role is

to try and simplify relationships to foster understanding. Managers

should be using a range of portfolio models along with other analyti-

cal tools in order to establish a rounded and comprehensive view of

their organisation’s performance.

● SWOT analysis

The SWOT (strengths, weaknesses, opportunities and threats) analysis

is another tool that is commonly used during the auditing process. The

SWOTdraws together the key strengths, weaknesses, opportunities

and threats from the audit. This tool should be used to distil the criti-

cal factors that have been identified during the auditing process. It is a

106 Strategic Marketing: Planning and Control

Prospects for sector profitability

Unattractive Average Attractive

Weak Disinvest Phased

withdrawal

Double or

quit

Average Phased

withdrawal

Custodial

growth Try harder

Enterprise’s competitive capabilitiesStrong Cash

generation

Growth
leader Leader
Figure 5.11
The Shell directional
policy matrix (DPM)
(Source: Shell, 1975)