Problems with portfolio models
From Wikipedia, the free encyclopedia
There are problems with the use of product portfolio techniques in crafting a brands strategic direction and positioning:
- The criteria are very general. Dimensions like industry attractiveness, market growth, market share, and business strength do not adequately assess competitive advantage in specific industries/markets.
- The use of these simplified models limit the range of influences that managers assess. A complete environmental scan is usually required if important criteria are not to be missed.
- These comparative statics models are more appropriate in assessing incremental change than discontinuous or high velocity change. They can portray gradual changes in market size, growth, share, profitability, etc., but discontinuous technological change or radical value migrations cannot easily be portrayed or assessed.
- These models are essentially non-teleological. They are not goal directed or driven by purpose. This fosters a cause/effect reversal. We should start with objectives, then determine strategies based on these objectives. We can then determine market characteristics.
- These models deny the oligopolistic nature of markets. In most markets, the implementation of our strategy (and competitors' strategy) will influence market characteristics.
see also: marketing, product positioning, product portfolio, marketing management, product management
