Strategy formulation
In a single-product or single-business organisation, the strategic context is in one industry. Corporate strategy and business strategy are the same, and resources are allocated on that basis. However, when organisations move into different industries — resulting in multiple product or service offerings — they become internally more complex and often larger in size. This makes resource allocation a more challenging strategic management task, since the mix of businesses must be well managed.
Consider an organisation like Rupert Murdoch’s News Corporation, a media conglomerate with interests in industries such as newspapers, magazines, television and the Internet. In such multi-business situations, strategy formulation involves portfolio planning to allocate resources among competing uses. A portfolio planning approach seeks the best mix of investments among alternative business opportunities.