Glossary of techniques for strategic analysis. This article provides a glossary of analytical techniques, страница 12

Barksdale, H. C. and Harris, C. E. (1982). Portfolio analysis and the product life cycle, Long Range Planning, December, 15(6).

Clarke, C. J. and Brennan, K. (1990). Building synergy in the diversi®ed business. In: P. McNamee (ed.), Developing Strategies for Competitive Advantage, Pergamon, Oxford.

Hedley, B. (1990). Strategy and the business portfolio. In: P. McNamee (ed.), Developing Strategies for Competitive Advantage, Pergamon, Oxford.

Hofer, C. W. and Schendel, D. (1978). Strategy Formulation: Analytical Concepts, West Publishing, St Paul, Minnesota.

Hussey, D. E. (1982). Portfolio analysis: practical experience with the directional policy matrix. In: D. E. Hussey and B. Taylor (eds), The

Realities of Planning, Pergamon Press, Oxford.

Hussey, D. E. (1991). Introducing Corporate Planning: Guide to Strategic Management, 4th edition, chapter 9, Pergamon Press, Oxford. McNamee, P. B. (1985). Tools and Techniques for Strategic Management, chapter 3, Pergamon Press, Oxford.

Neubauer, F-F. (1990). Portfolio Management, Kluwer, Holland.

Ohmae, K. (1983). The Mind of the Strategist, chapter 12, Penguin Books, London.

Robinson, J., Hitchens, R. E. and Wade, D. P. (1982). The directional policy matrix: tool for strategic planning. In: D. E. Hussey and B. Taylor (eds), The Realities of Planning, Pergamon Press, Oxford.

Segev, E. (1995). Corporate Strategy: Portfolio Models, International Thomsom Publishing/ Boyd and Fraser, London.

Segev, E. (1995). Navigating by COMPASS: Corporate Matrix Portfolio Analysis Support System, International Thomsom Publishing/Boyd and Fraser, London. (Includes computer disk to facilitate use of the various methods described.)

See also: risk matrix, risk-return matrix and technology grid.

Product/market matrix

This is a simple but very useful way of thinking through strategic options. One axis looks at markets, existing and new. Another looks at products, existing and new. The matrix thus consists only of four cells. One value of the approach is that the patterns of risks are likely to be different in each. The matrix is sometimes represented as a product/ mission matrix.

Variants of this matrix include.

*  Changing the axes to suppliers and technology to analyse purchasing strategy.

*  Changing the axes to sources of ®nance/ uses of ®nance to study funding.

*  A more complex variant which lists the four product market options on one axis, and on the other shows possible strategic actions, such as licensing, joint venture, and acquisition.

Ansoff, H. I. (1965). Corporate Strategy, chapter 7, McGraw-Hill, New York. Hussey, D. E. (1976). In¯ation and Business Policy, chapter 5, Longman, London.

Hussey, D. E. (1991). Introducing Corporate Planning: Guide to Strategic Management, 4th edition, chapter 7, Pergamon Press, Oxford.

Taylor, B. (1975). The crisis in supply markets: developing a strategy for resources. In: D. H. Farmer and B. Taylor (eds), Corporate Planning and Procurement, Heinemann, London.

Pro®ts graph

See breakeven analysis.

Risk analysis

An approach using the Monte Carlo method to draw numerous possible values for all the factors in a capital project, with the chance of drawing any value being proportionate to its probability. This results in numerous combinations of factors, each of which is subjected to DCF analysis. The spread of outcomes gives an indication of the degree of risk to which the project is subject.

Pappas, J. L. and Brigham, E. F. (1979). Managerial Economics, 3rd edition, chapter 13, HoltSaunders, Hillsdale, Illinois.,

Van Horne, J. C. (1971). Financial Management, 3rd edition, chapter 12, Prentice-Hall, Englewood Cliffs, New Jersey.

See also: discounted cash ¯ow and sensitivity analysis.

Risk matrix