Portfolio Management for Strategic Business Unit-myassignmenthelp

Question: Discuss about the Portfolio Management for Strategic Business Unit. Answer: Introduction The physical and financial resources of an organization are often not adequate to meet all the project ideas of an organization. The organizations should ensure to invest in the right set of projects, which can be aligned with the Business Strategy of the organization. Evaluation of projects as a separate entity is not recommended within the context of Strategic Business Unit ( SBU) of an organization. The Project Portfolio Management has two process of project selection and prioritization of projects (Prez et al. 2017). The project should be selected from a pipeline of projects. It is important to prioritize from the project portfolio by deciding which projects require investment and which projects are required to be killed.The management of the portfolio of projects results in successful implementation of the projects, which sustain competitive advantage. It is of paramount importance to invest in the right set of projects for successful development of new products and for implemen tation of strategy successfully. The prioritizations of projects are essential because the resources of an organization are scarce and should be judiciously allotted. The management of project portfolio also determines the timing of implementation of a project. The resources are dependent on time and some projects are required to be completed first , thus projects are interdependent on each other. The projects are subjected to risks from both internal and external factors like schedule, cost, market and technological related risks (Hu and Szmerekovsky 2017). The screening methods for projects are adopted parameters are identified for acceptable risk like Monte Carlo Simulation. The BCG Matrix provides an overview of balanced Portfolio of projects. Projects can be grouped into Bread Butter, Pearl, White Elephant and Oyster under this matrix. Literature Review Overview of the project portfolio management The suspension or abandonment of projects are called killing of projects. There are projects, which are not aligned to the organizational mission, strategy and goals of the organization and there are projects whose proportion of funding is higher than the expected benefits. These projects require killing in order to effectively manage the project portfolio. There are various methodologies both financial models and non-financial models for selection of projects. However, multiple methods should be adopted for selection of projects because there are no best approach (Kerzner 2017). Cost-benefit evaluation methods like payback period, net present value, average rate of return and payback period and evaluating the economic return of a project are methods of the financial estimates of the investment in a project. Projects can also be classified into high, medium and low based on the competitive position of business and the attractiveness of the industry. The Strategic Bucket Model suggest s that projects should be categorized into spending buckets, and it should be analyzed if actual spending is consistent with the desired spending (Palermo 2017). The Comparative Approaches of Projects suggest identification of strategic objectives, each objective should have a weight and projects should be compared on basis of their contribution to each objective. The information systems plays a pivotal role in project management, for instance, the Project Decision Support Systems.The projects should not be killed instantly and bottleneck of project selection is loss of opportunity and involvement of time of management. Project selection Project portfolio management refers to a process, which is selected by an organization to achieve significant outcomes from a specific project (Linares et al. 2017). Portfolio management includes risk reward, project duration fund of the project and expected outcomes. In a project portfolio, management selection of the project is important from the pipeline projects. Selection of the project portfolio is associated with the organizational priorities. Selection of the project portfolio is a dynamic decision of a business makes the projects active. This selection of the project portfolio enables the business organization to revise their selected project. During the selection of the project, evaluation of the new project is done and a particular project is selected and prioritized. In a project selection, the organization focuses on the projects, which are time and cost effective with greater rate of success (Le and Nguyen 2008). It is important for an organization to meet the project p ortfolio in order to gain the corporate strategy. A systematic approach has been taken in order to carry out a successful project portfolio selection (Palermo 2017). This ensures the competitive advantages of an organization. Best practices are adopted in this systematic approach. Poor selection process of the project portfolio leads the organization to face failure in their project. Among the too many projects, it is crucial to select the project portfolio in a proper way to deliver the business strategy in a successful manner. Process model and Pipeline model of project selection This model focuses on the subjective and objective analysis during the project selection. On the other hand, pipeline model includes the development of vision and mission, analysis of the environment, analysis of the mission, strategic development and strategic implementation (Aiello and Gatti 2017). However, such two models are essential during the project selection process. This model enables the business organization to identify the critical success factors and key business activities for the selection of a project. Project prioritization Suspending of a project is one of the crucial activities of project portfolio management. However, the existing project is killed in the in project prioritization process. Projects those are outside the organizational mission and unrelated to the goals and strategy of the organization are excluded in the project prioritization process. Cost benefit evaluation is a crucial part of the project portfolio management. This evaluation focuses on the profit that is executed from the initial investment in a project after a period. For the project, prioritization market research is crucial. However, a proper market research enables the business organization to forecast the demand of the new service and products in the current market (Guan et al. 2017). Focus group analysis is another part of the market research. Budget allocation is a major step of project prioritization. This allows each department of a business to invest according to their own priority (Shah et al. 2017). Spreadsheet based project scoring is helpful to carry out the project with low price. Value based collaborative approach in project prioritization is effective to set the business goal and reduce politics within a project. Resources for the project portfolio management Financial resources, human resources, equipment and the capacity are the major resources of portfolio management (Kerzner 2017). For a business portfolio management financial resources is crucial as without investment no project can be developed. Therefore, human resources are required to manage the entire operation process in the development of project portfolio. Equipment or technology is most crucial for the success of any project. However, by utilizing the advanced technology an organization is able to manage their project portfolio quickly and easily. On the other hand, emerging technology, geographical barrier, market trend and political barrier often generate risk for the portfolio management. Strategic bucket model Strategic bucket model includes strategy, project bucket, gap analysis, identification of spending and project ranking. These components are required to make a complete portfolio (Hu and Szmerekovsky 2017). Strategy bucket is required to establish a framework of a business project. On the other hand, money is crucial to implement the adopted strategy. Determination of the spending is essential for the cost benefit analysis. However, a gap analysis allows the organization to identify the loopholes in the portfolio management. Case study analysis in context of Starbucks Starbucks Corporation is a popular American coffee organization established in Washington. This organization has 23, 768 stores worldwide. This organization is considered as the prime representative of the second wave coffee. This organization offers variety of coffees in their organization with high quality. Brad coffee, bottled cold drink and ice-cream of Starbucks are available in the grocery stores. A business includes product portfolio as it has a range of products (Prez et al. 2017). Development and management of the product portfolio is a big problem for a business as allocation of the proper investment is necessary. In the context of Starbucks by using BGC matrix, the product portfolio can be analyzed. BGC includes star, cash cow, question mark and dog, which are the major market segments. Stars focuses on the high growth of the products. In this segment, the business can compare with its competitors and heavy investment is required in this segment (Aiello and Gatti 2017). Ca sh cow highlights on the low growth of the products with high market share. Here little investment needed. Question mark is related to low market share with high growth of market. In this segment, business requires substantial investment. Finally dog refers to low market share with low growth of products. Enough cash is generated in this field. In the context of Starbucks, coffee and packed foods operate in high growth market and ensure the high share. As a result, from these products high amount of cash generates. Hence, this organization needs more investment to promote such products. Tea operates in the market having high growth with low share. Starbucks is famous for their coffee products. Twingings is the major competitors of Starbucks in terms of tea quality. However, Starbucks tea includes inferior quality. For this product Starbucks needs to identify the reason of low market share and to develop strategies to enhance the market share. Mug is another product of Starbucks operates in low growth market with high market share. This means such products are well established and generates good cash flow. Based on the seasonal trends these products can provide a good profit to Starbucks. Finally, packaged coffee beans are operating in low market share with low growth. As a result, these products cannot generate much profit for this organization (Starbucks.in. 2017). Conclusion The above study focuses on the portfolio management in the business project. It has been received that portfolio management includes project selection and project prioritization. Therefore, in the context of Starbucks BCG matrix has been applied to understand their product portfolio management. On the other hand, it has been found that their coffee and packed foods operate in the Stars position of the BCG matrix, which need more investment. However, a significant amount of cash flow has been received from the tea product of Starbucks. On the other hand, packaged coffee beans operate in low growth market with low share thus; Starbucks does not get good cash flow from such segment. 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Shah, S., Naghi Ganji, E. and Coutroubis, A., 2017, May. Development of NPD portfolio management in project based environments. InAdvances in Manufacturing Technology XXXI: Proceedings of the 15th International Conference on Manufacturing Research, Incorporating the 32nd National Conference on Manufacturing Research, September 57, 2017, University of Greenwich, UK(Vol. 6, p. 409). IOS Press. Kerzner, H., 2017.Project management metrics, KPIs, and dashboards: a guide to measuring and monitoring project performance. John Wiley Sons. Hu, Q.J. and Szmerekovsky, J., 2017. Project Portfolio Selection: A Newsvendor Approach.Decision Sciences,48(1), pp.176-199. Oosthuizen, C., 2017.Project portfolio management best practice and implementation: A South African perspective(Doctoral dissertation, Stellenbosch: Stellenbosch University). Prez, F., Gmez, T., Caballero, R. and Liern, V., 2017. 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