The nine-cell attractiveness-strength matrix provides clear, strong logic for ______.
A) concentrating resources to bolster unattractive and competitively weak performers in the corporate portfolio.
B) measuring only business strength in allocating resources and investment capital to the different businesses.
C) concentrating resources in only those business units that are destined for squeezing out the maximum cash flows.
D) using both industry attractiveness and business strength measurements in allocating resources and investment capital to a corporation's different businesses.
E) using both resource fit and product strength measurements in allocating resources and investment capital to its different businesses.
D) using both industry attractiveness and business strength measurements in allocating resources and investment capital to a corporation's different businesses.
The nine-cell attractiveness–strength matrix provides clear, strong logic for why a diversified company needs to consider both industry attractiveness and business strength in allocating resources and investment capital to its different businesses. A good case can be made for concentrating resources in those businesses that enjoy higher degrees of attractiveness and competitive strength, being very selective in making investments in businesses with intermediate positions on the grid and withdrawing resources from businesses that are lower in attractiveness and strength unless they offer exceptional profit or cash flow potential. An equally good case can be made for withdrawing resources from subsidiaries in the three cells representing portfolio businesses that are lower in attractiveness and strength—unless they offer exceptional profit or cash flow potential. Businesses in the three cells in the lower right corner of the matrix typically are weak performers and have the lowest claim on corporate resources. Such businesses are typically good candidates for being divested or else managed in a manner calculated to squeeze out the maximum cash flows from their operations.
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