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Separate portfolio choices from competition
Deciding whether to acquire a second business, exit an activity or share capabilities across a group is a portfolio question. Deciding which customers a particular business should serve and how it will win their preference is a business-level question.
The choices influence one another, but they need clear decision owners. A strong operating plan cannot by itself establish that an acquisition belongs in the group.
02 /
Test the reason for common ownership
Ask what the group can do that the businesses could not do as effectively separately. Possibilities might involve capabilities, customer access or coordinated investment, but each needs evidence. Common ownership also introduces coordination and management demands.
Use our acquisition strategy guide to connect a proposed purchase to an explicit strategic purpose.
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Allocate capital and attention deliberately
Compare investment opportunities across the businesses using consistent assumptions. Examine cash needs, risks and management capacity, not just growth ambitions. Consider whether one activity is supporting another without a clear rationale or review point.
Our international expansion guide provides a business-case structure for one possible growth choice. The same discipline applies to domestic additions.
04 /
Let each business explain how it will compete
Each business still needs choices about customers, proposition, capabilities and economics. Group targets should be translated into a credible operating strategy rather than simply passed down as a revenue number.
A plan and strategy comparison can help sort the documents and discussions needed at each level. Review whether the portfolio rationale remains true as circumstances change.
Use this in your business
Which level owns the question?
| Question | Primary level |
|---|---|
| Should we own this second business? | Corporate / portfolio. |
| Which customer segment should this business prioritise? | Business strategy. |
| Where should the group invest scarce capital? | Corporate / portfolio. |
| What proposition will customers choose? | Business strategy. |
| Which capabilities should be shared? | Group choice, tested with each business. |
| How will the chosen work be delivered? | Operating plans and accountable teams. |
A practical example
A two-business illustration
An owner might hold a manufacturing business and a service business. Whether shared customer access justifies the combination is a portfolio question. How the service business prices and delivers its offer is a competitive question. Treating both as “grow sales” hides the different assumptions and responsibilities.
Your next move
Discuss the portfolio decision behind your growth plans
Bring the reason behind the next acquisition or portfolio change. We can help test the ownership logic and the strategy each business needs.
Discuss the portfolio decision behind your growth plans