Business Portfolio and Dynamic Capability Development Report

This report discusses the business portfolio and dynamic capability development of Millennium Health Sciences. It includes an analysis of the company's four business units, BCG Matrix, GE-McKinsey Matrix, Synergy Matrix, and recommendations for each unit. The report also discusses the company's dynamic capability and provides recommendations for resource allocation, identifying and assessing opportunities, mobilizing resources, and transforming and reconfiguring the business units.

Millennium Health Sciences
Business Portfolio and Dynamic Capability
Development Report
[Student Name] – [Student Number]

Introduction
 MHS Business Portfolio
 4 Business units operating in various verticals
 Competition among different SBU for parent company’s
resources
 Business of 4 SBUs
 Nutrino – health supplements
 Dermatech – Cosmeceuticals
 LOOKS – cosmetic products
 Energino – Energy drinks

BCG Matrix
?
Relative Market Share
Market Growth Rate

BCG Matrix of MHS
Energino – Dog – low market share, low industry growth
Dermatech – star, - High revenue, high market share, high
industry growth rate
LOOKS – Question mark - Market share is low but growth
rate of industry is high
Neutrino – Cash cow – Medium competitive strength, low
market growth rate and high revenue generation

GE-McKinsey Matrix
Growt
h
Competitive strength of
business unit
High Med Low
Industry
attractiveness
High
Med
Low
Growt
h
Harves
t
Selective Harves
t
Harves
t
Selective
SelectiveGrowt
h
1
2
3
4
1 Energino
2 Neutrino
3 Dermatech
4 LOOKS

GE Nine cell matrix
GE matrix helps in allocation of resources among different
business units by assessing internal and external factors
alike (Amatulli, Caputo, & Guido 2011)
.
While Dermatech appears to be most important business
unit as per the matrix, Energino performs worst.
Investments should increase in Dermatech and Energion
and LOOKS should not receive any further investments
(Mokaya, Wakhungu, & Gikunda 2012).

Synergy Matrix
Threshold of
acceptance
Misfits
Incoming:
Benefits from belonging
to portfolio
+-
Fits
+
-
Outgoing:
Benefit to portfolio
Altruists
Givers
Parasites
Takers
1
2
3
4
1 Energino
2 Neutrino
3 LOOKS
4 Dermatec
h

Business categorisation
BCG
Matrix
GE-McKinsey
Matrix
Synergy
Matrix
LOOKS Question mark Harvest Taker
Neutrino Cash cow Selective Giver
Dermatech Star Growth Fit
Energino Dog Harvest Misfit

LOOKS
 Analysis
 Has established brand image and employs most of the
workforce
 Huge potential in niche products
 Question mark in BCG matrix and taker in synergy matrix
indicating need for radical changes in strategy
 Stable revenue but might decline due to competition
 Recommendations
 Streamline product portfolio and include high demand products
like organic and herbal products
 Invest in R&D
 Explore foreign markets

Neutrino
 Analysis
 Major R&D hub
 Developed a new revolutionary drug
 Operating in mature Australian market among high competition
 Cash cow and giver for other businesses
 Strong research team
 Recommendations
 Explore Asian markets to increase profitability
 Maintain market leadership by continuous R&D

Dermatech
 Analysis
 High growth market, and high market share with steady revenue
inflows
 Lack of understanding of exports
 Regulatory hassles
 Oldest and most profitable business unit
 Recommendations
 Set up a competent export team to expand foreign business
 Work towards protection of IPR
 Cash upon the demand of Australian products by market expansion

Energino
 Analysis
 Worst performing product in terms of growth, revenue and
industry attractiveness
 No synergy with other business units
 R&D has not given any successful results in the past
 Only product which was inorganically acquired
 Recommendations
 Product line should be sold or closed down
 Focus the resources and manpower to other potential research
areas and SBUs

Conclusion
 Resource allocation should be revisited after analysing
strategic position of each SBU
 Flow of funds should be stopped to Energino considering
 It is misfit in company portfolio
 It is draining out all resources without contributing to
revenue in return
 Company should reduce the investment in LOOKS till the
time unnecessary products are removed from the
product portfolio

Conclusion
Dermatech
Dermatech is the star product of the company and deserves
maximum resource allocation
Company should start looking for unsaturated foreign markets
before Australian markets start saturating
 Neutrino
Since the business is major revenue generating SBU, company
should focus on keeping its portfolio novel
Shift to high growth markets in Asia
Eradicate competition from the money received from Asian
markets

Introduction
 MHS Dynamic Capability
 Dynamic capability is an ability of the firm to
continuously adapt its capabilities as per the changes in
the environment it operates in (Li-Ying, Wang, & Ning
2016)
 MHS is a 50 year old organisation with 4 business units
and diverse portfolio
 Company is looking at solutions to optimally utilise
resources among SBUs
 Most of the products operate in highly competitive
markets
 Need to explore new markets and effectively allocate

Identify and assess opportunities
 Analysis
 MHS is an established company in Australia, but has not
explored the export potential completely.
 Company has lot of products in its portfolio but not all
business units implement R&D to assess future needs
 Traditional culture due to seniority based promotion
system
 Lack of clear demarcation of funds among SBUs
 Lack of information sharing among SBUs

Identify and assess opportunities
 Recommendations
 MHS should leverage on following opportunities
 Heavy demand of nutritional supplements in Asian
markets
 High credibility of Australian products
 High potential of growth in niche markets like herbal and
organic beauty products
 Possibility of joint ventures with foreign players

Mobilise resources
 Analysis
 Policy of divide and rule among SBUs
 Overlapping of R&D capability among different SBUs
 Huge market share and talented staff
 Lack of export focus

Mobilise resources
 Recommendations
 Employing international business team who can help in
exporting the business
 Decrease in product portfolio and shift towards herbal
products
 Leave the businesses which are not giving and resource
synergy

Transform and reconfigure
 Analysis
 Since business units do not cooperate with each other,
the staff of one business unit does not provide any value
to other
 Since there is no information sharing, the company ends
up spending much more than required
 Due to lot of unnecessary products in portfolios, the cost
has increased
 Due to operations in highly competitive markets,
margins have fallen

Transform and reconfigure
 Recommendations
 Cross functional and project based teams should be set
up so that duplicate efforts on R&D can be saved
 Strength of one SBU can be used for the benefits of
others as well
 Using expertise of herbal products of Neutrino for other
SBU like LOOKS
 Using the staff of Energino having international
experience to handle exports of Dermatech
 Use the new research of seaweed product to reinvent all
three SBUs

Conclusion
 MHS Dynamic Capability
 MHS has a strong product portfolio, but it lacks the
synergy in different SBUs which create problem in
seizing the upcoming business opportunities
 Divide and rule policy is expensive for the company
 Allocation of resources must be reconfigured among
business units
 Expertise of one unit can be of benefits to other SBUs as
well.

References
Amatulli, C., Caputo, T., & Guido, G. 2011, Strategic Analysis through
the General Electric/McKinsey Matrix: An Application to the Italian
Fashion Industry. International Journal of Business and Management ,
vol. 6, no.5, pp. 61-75.
Li-Ying, J., Wang, Y., & Ning, L. (2016). How do dynamic capabilities
transform external technologies into firms’ renewed technological
resources? – A mediation model. Asia Pacific Journal of Management .
Mokaya, S. O., Wakhungu, B., & Gikunda, R. M. (2012). The
ApResource Allocation in Kenya Airwaysplication of McKinsey Matrix in
Determination of Route Attractiveness and. International Journal of
Humanities and Social Science , vol. 2, no. 3, pp. 259-268.
