“Knowing ourselves is the beginning of all wisdom”



Our future strategy will be built on our strengths, or it will have no better chance than a complete start-up. We need to analyse our own company to understand how our business works and how we make money.

Questions to answer

  • How is our portfolio of brands/products/businesses positioned?
  • What is our competitive advantage? Does it come from assets we own or processes we are good at? What is the cause of this advantage? What are our strengths and weaknesses?
  • What have we learnt over the last 12 months? How have we performed against our Strategic KPIs?
  • Where are we allocating our discretionary resources?
  • Where do we make money (by customer/channel/product/business/market)? What is the profit trend? Why?
  • What are the key profit levers for our business?
  • What drives our cost structure? How do our costs compare with our competitors?

Example Framework: BCG Matrix

BCG Matrix
Use the BCG Matrix to analyse the strength of our portfolio

Our strategy drives resource allocation. Is our investment going to the right places? The BCG Matrix is a classic framework to guide resource allocation across a portfolio. It relies on the assumption that, ceteris paribus, we will get better returns from investing these discretionary resources:

  • In growing markets
  • In markets where we lead in market share

We can plot our portfolio on this matrix. We can analyse our portfolio by products, markets, segments, businesses or channels.

There is a generic investment stance for each box in the matrix:

  • Star - Invest fully
  • Cash Cow - Defend market share to maintain position
  • Question mark - Double or Quits - Make a binary choice to either invest heavily to overtake competitors and become the leader, or pass on this opportunity
  • Dog - Minimise discretionary investment; exit if easy

This framework will tell us the right investment stance on each part of our portfolio. Once we have this “top-down” answer, use it to challenge our current resource allocation.

“Be number one or number two in every market,

and fix, sell or close to get there.”


Jack Welch, CEO General Electric


Additional Frameworks