Strategy for the Corporate Level: Where to Invest, What to Cut Back and How to Grow Organisations with Multiple Divisions, 2nd Edition

Chapter Six Making Decisions about Where to Invest and What to Avoid

The three logics can be combined to decide where to invest, where to cut back, where to buy and where to exit – in other words, to make portfolio decisions. Because each logic contributes something to the decision, we recommend that managers keep all three in mind when making decisions. Typically, managers start with one of the logics and come to the others later. For example, managers at Apple might start by looking for attractive product categories to enter (business logic), focusing the search on areas where they can add some value (value added logic). If acquisitions are required, they are evaluated to determine whether they are affordable (capital markets logic). ...