LIST THE FOUR BASIC STRATEGIES USED ONCE AN ORGANIZATION HAS IDENTI...

4. List the four basic strategies used once an organization has identified its strategic business units in

terms of the portfolio model. Describe when each is used.

ANS:

The four basic strategies are (1) Build is used when an organization has identified an SBU it believes

has the potential to be a star. Most likely the SBU has been identified as a problem child. (2) Hold is

used when the SBU has been identified as a very successful cash cow. (3) Harvest is used with all

SBU classifications except stars. The basic goal with this strategy is to increase short-term cash return.

(4) Divest means to get rid of SBUs with low market share. Divestment strategy may be used with

either dogs or problem children (also called question marks).

PTS: 1

REF: 29-30

OBJ: 02-3

TOP: AACSB Communication

KEY: CB&E Model Strategy

MSC: BLOOMS Level V Synthesis