Typically this leads to a choice of 4 broad strategies:

1. Building the market share to strengthen the SBU's position
2. Holding the shape at the current level to ensure that the maximum amounts of cash are generated
3. Harvesting as much cash as possible in the short term, even if it weakens the SBU's long-term future
4. Divesting by getting rid of the SBU that it no longer acts as a drain on resources

 A balanced portfolio exhibits certain characteristics including a mixture of cash cows and stars

Unbalanced and potentially dangerous portfolios have too many dogs or question marks and too few stars and cash cows since this would lead to insufficient cash being generated on a day to day basis to fund or support the development of other SBU's

Other approaches to portfolio analysis have developed to include:

-General Electrics multi-factor matrix

-Shell directional policy matrix

-Arthur D. Little Strategic Condition matrix

-Abell and Hammond's 3X3 investment opportunity chart

Douglas Brownlie argues that portfolio analysis:

• is over-simplified
• often offers a misleading representation of strategic options
• makes use of inappropriate and overly general measures
• rests on the assumptions that market leadership invariably offers benefits
• ignores a real potential and the benefits of market niching
• ignores a series of important and strategic factors in the competitive environment

...argues only 3 types of strategy:

-overall cost leadership

-focus

-differentiation 

...he suggests that in order to compete effectively, strategists need to select a particular strategy and then pursue it consistently

The firm maximises its relative competitive strengths against a background of a clear understanding of five forces:

1. Bargaining power of suppliers
2. Bargaining power of customers/buyers
3. Threat of new entrants to the industry
4. Threat of substitute products
5. Rivalry amongst current competitors

 ISSUES OF COMPETITIVE ADVANTAGE

The development, pursuit and exploitation of competitive advantage is at the very heart of marketing strategy

 HUGH DAVIDSON (1997) "Offensive Marketing" identified 8 significant bases of competitive advantage:

1. Superior product benefits
2. Advantages in the product or brands by virtue of the brand's advertising, country of origin etc. are perceived by customers to be important
3. Low cost operations which offer scope for aggressive pricing
4. Legal advantages e.g. patents, copyright
5. Superior and influential contracts with those within the industry or government
6. Greater knowledge as the result of market research etc
7. Economies of Scale
8. Competitive offensive attitudes and a determination to succeed