portfolio-strategy

# Portfolio strategy Most organizations fund by inertia. Last year's allocation plus a percentage, adjusted by who argued hardest. Portfolio strategy is the discipline of deciding again, deliberately. ## Assess each line on two axes **Attractiveness** — is this a good place to be? Market size and growth, structural profitability, concentration of buyer power, regulatory direction, and how the economics behave as it scales. **Right to win** — is it good *for us*? Our position relative to alternatives, the assets or capabilities that transfer, and whether the advantage is durable or borrowed. The combination gives you four postures, and the honest one is usually uncomfortable: - **Attractive, we can win** — fund properly. Underfunding these is the most common and most expensive portfolio error. - **Attractive, we cannot win** — the seductive trap. Everyone wants in on a good market. Entering without an advantage funds someone else's growth. - **Unattractive, we can win** — harvest. Run for cash, do not invest for growth. - **Neither** — exit. Slowly and reluctantly is how these consume a decade of attention. ## Judge on marginal return, not absolute size The question is never "is this business good." It is "what does the next dollar do here versus elsewhere." A large profitable line may be a poor place for incremental investment; a small one may be the best. Watch for **cross-subsidy**. A weak line supported by a strong one is a decision, and it should be an explic...