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These factors are categorised into three sections:
External Environmental factors, Internal Factors and the Common Factors as given below:
1. External Environmental Constraints
a.
Competition from Other Businesses.
b.
Social and Cultural Factors.
i.
Industry and Cultural Backgrounds.
c.
Intra-Organisational Factors
d.
Laws , Regulations and Govt Policies.
e.
Technological factors
f.
Environmental factors
2.
Internal Environment
a.
Changes in Executive Management.
i.
Managerial Attitude
towards Risk
ii.
Managerial Power Relations
iii.
Styles of Decision Making
b.
Transformations in Organizational Structure.
c.
Corporate Culture
d.
Personal Characteristics
e. Execution Capacity and a Few Others.
3.
Common Factors
a.
Value System in Decision making
b.
Influence of Past Strategy
c.
Coalition
Phenomenon.
d.
Pressures from Stakeholders
e.
Time Dimension
f.
Reaction of Competitors
g.
Availability of Information
h.
Critical Success Factors and Distinctive Competencies
Alternatively it can be grouped into quantitative and qualitative factors.
Quantitative factors include the business unit's market share, growth
rate, profitability and debt/equity ratio. Qualitative factors include its brand name,
values, core strengths and management. These factors, where unique and
valuable, contribute to the business unit's strategic advantage amongst its
competitors. The strategist’s challenge is
to simultaneously manage three critical factors: values, opportunities and
capabilities.
There is still another form of classification based on the variables from theoretical frameworks to study external and internal business environment of the firm
This analysis is adaptable to multi
product market firms in which each product/market is managed as a separate
business or profit centre and the firm is not dominated by single
product/market. Portfolio Techniques with display matrix are as follows-:
•
BCG Growth-Share Matrix
•
GE Nine-Cell Planning Grid
•
Profit Impact Market Strategy Model
•
Product/Market Evolution Matrix
• Directional Policy Matrix
• Strategic Position and action evaluation.
These display matrices that hold key variables in different proportions of influence on portfolio strategy were specifically covered in earlier posts.
Those who read this, also read:
1. Factors affecting Portfolio Strategy- Internal Factors
2. Factors affecting Portfolio strategy - External Factors
3. Factors Affecting Portfolio Strategy- Common Factors
4. BCG Matrix
5. G E Matrix
6. Organizational Capability Profile
