Once the company has analysed its current business portfolio and determined which SBUs should receive more and which less investment, it must now shape its future portfolio. This is the second essential part of designing the business portfolio: Portfolio Planning.
By using the Boston Growth-Share Matrix portfolio analysis approach, the firm has learnt how its current business portfolio looks like and which strategic business units should receive more and which others less attention. But in an increasingly rapidly changing market environment, firms must be prepared for the future. Constant innovation is absolutely critical to survive in the market. If the firm wants to compete more effectively and satisfy stakeholders, it needs growth, but even more important, profitable growth. Therefore, we now focus on the part of designing the business portfolio that involves finding products and businesses the company should consider in the future. This is done by developing strategies for growth and downsizing. We call it Portfolio Planning.