Final answer:
Portfolio analysis is the technique that managers use to analyze strategic business units (SBUs) as though they were a collection of separate investments. It involves evaluating each SBU's performance based on metrics such as market share, growth potential, and profitability. This technique helps managers make informed decisions about resource allocation and investment priorities.
Step-by-step explanation:
The technique that managers use to quantify performance measures and growth targets to analyze its clients' strategic business units (SBUs) as though they were a collection of separate investments is referred to as portfolio analysis. In portfolio analysis, managers treat each SBU as a separate investment and evaluate its performance based on key metrics such as market share, growth potential, and profitability.
By using portfolio analysis, managers can determine the strengths and weaknesses of each SBU and make informed decisions about resource allocation, investment priorities, and divestment. This technique helps managers identify SBUs that are performing well and should receive additional resources, as well as identify underperforming SBUs that may need restructuring or elimination. For example, a company may have multiple SBUs, such as a software division, a hardware division, and a services division. By using portfolio analysis, the company can assess the performance of each division and decide how to allocate resources to maximize overall business growth.