Abstract
AbstractWe show that a quantitative portfolio simulation model can be used effectively in the allocation of investment funds in multibusiness firms. The portfolio simulation model, which is formulated with an extended system dynamics approach, further allows us to show severe limitations of qualitative portfolio approaches, such as that of the Boston Consulting Group (BCG). The simulation experiments demonstrate that it can be extremely dangerous for diversified companies to follow the investment suggestions typically drawn from the BCG portfolio matrix if competitors choose a course of action that is contradictory to normative situations. The simulation runs additionally show that in an economic depression a more flexible positioning strategy can yield much better results than the fixed positioning strategy typically used by the BCG.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
