Evaluation of portfolio planning tools on the example
of the Polish banking industry

von: Florian Langhammer

TABLE OF CONTENTS

1 INTRODUCTION 1

2 ANALYSIS 1

2.1 Portfolio planning tools 1

2.1.1 The Boston Consulting Group Growth-Share matrix 1
2.1.2 The GE Market Attractiveness-Business Position matrix 2

2.2 Analysis 2

2.2.1 The Polish banking sector and LG Petro Bank S.A. 2
2.2.2 Effectiveness of the BCG matrix in the Polish banking industry 4

2.3 Critical evaluation of portfolio planning tools 4

3 CONCLUSION 5

4 APPENDICES 6

5 BIBLIOGRAPHY 7

1 INTRODUCTION

The following report concentrates on the in-depth analysis of the Polish banking industry in general and LG Petro Bank S.A. in particular with the aid of accepted portfolio planning tools identified in contemporary relevant textbooks. Two widely accepted tools are presented and their limits and constraints shown in a critical evaluation in the light of new perspectives and opinions found in journal articles and textbooks and also in the context of the situation of the Polish banking sector.

ANALYSIS

2.1 Portfolio planning tools

“The increasing rate of change in economic, political and social environments of business today has lead to growing competitiveness, uncertainties and risks and thus to a dramatic increase in attention given to strategic planning of all kinds. Marketing planning has itself received a good deal of attention.”1 According to Grant2 portfolio planning models pursue two major purposes: 1 to assess the position of a business in its industry together with the prospects for that industry over the medium to long-term. 2 to analyse the portfolio balance and suggest strategies for individual businesses in terms of cash flow, future prospects and risks.

2.1.1 The Boston Consulting Group Growth-Share matrix

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1 Turnbull (1989), p. 7
2 Grant (1995) found in Hooley [et al.] (1998), p. 54