A company's portfolio is the sum of its business, assets and products. In portfolio analysis, top management views its product lines and business units as a series of investments from which it expects returns.
The best business portfolio is the one that best fits the company’s strengths and weaknesses to opportunities in the environment.
A perfect portfolio analysis is shaped to meet and suit the company's potency and also enable it to exploit the best opportunities available.
Analysis of a portfolio involves deciding on the relative importance of available business and investment opportunities.
Portfolio analysis can be defined as a set of techniques that help strategists in taking strategic decisions with regard to individual products or business in a company’s portfolio.
It is primarily used for competitive analysis and corporate strategic planning in multi-product and multi-business firms.
The objective is to help divert resources from its cash-rich businesses to more prospective ones that hold promise of a faster growth so that the company achieves its corporate level objectives in an optimal manner.