Portfolio Concept Research Articles

A Divestment Model: Migration to Green Energy Investment Portfolio Concept

In a targeted terminal wealth generated by bond and risky assets, where the proportion of a risky asset is gradually being phased down, we propose a divestment model in a risky asset compensated by growth in a bond (insurance). The model includes the phase-down rate of the risky asset, c(t), the variable proportion, π(t), in a risky asset and the interest rate, r, of the bond. To guide the growth of the total wealth in this study, we compared it to the Øksendal and Sulem (Backward Stochastic Differential Equations and Risk Measures (2019)) total wealth for which c(t)=0, and π(t) is a constant. We employed the Fokker–Planck equation to find the variable moment, π(t), and the associated variance. We proved the existence and uniqueness of the first moment by Feller’s criteria. We have found a pair (c*(t),r*) for each π(t), which guarantees a growing total wealth. We have addressed the question whether this pair can reasonably be achieved to ensure an acceptable phase-down rate at a financially achievable interest rate, r*.

ФОРМИРОВАНИЕ СБАЛАНСИРОВАННОГО СТРАТЕГИЧЕСКОГО ПОРТФЕЛЯ ДИВЕРСИФИЦИРОВАННОГО ПРЕДПРИЯТИЯ

Diversification, as a development strategy in a dynamic and unpredictable environment, opens up opportunities for growth by expanding the range of products and market boundaries. One of the key problems in the transition to diversification is how to form a strategic portfolio. The article formulates the principles of the strategic portfolio concept and describes the experience of using the tools for assessing its balance.

LUXURY-ТЕХНОЛОГІЇ ЯК ЗАСІБ ПІДВИЩЕННЯ КОНКУРЕНТОСПРОМОЖНОСТІ ПІДПРИЄМНИЦЬКОГО БІЗНЕСУ

The article seeks to explore the specifics of premium brands and current trends in business entrepreneurship. Managing modern Luxury business, in other words, fashion industry, and in particular designer brands as its key asset is an independent scientific and applied research issue which has gained increasing importance over the last decades. The economic crisis spurred by the COVID-2019 pandemic has become a profound turmoil for the global economy. However, according to the results of modern research studies, this situation has contributed to creating favourable environment for bringing business to a qualitatively new level which resulted in the first place in shifting much of creative business processes to a virtual domain, thus transforming fashion business into online business models. The research hypothesis is represented by the statement that a thoroughly developed and implemented marketing strategy based on Luxury technologies, as well as doing entrepreneurship-driven business including strategic marketing positioning, will facilitate a significant increase in the company market share and profits along with finding pathways to outperform the competitors, including big international market players. The purpose of this study is to substantiate the variability of making use of Luxury technology as a promising tool to boost the competitiveness of entrepreneurial ventures. The methodological framework of the research covers a branding theory – to identify the most appropriate methods to build Luxury brands, strategic marketing tools – to develop a business strategy to promote Luxury brands, portfolio and matrix approaches – to justify the positioning of Luxury brands. In addition, the study offers a matrix approach to managing designer brands, together with suggesting a better understanding of the role of a designer brand portfolio concept as the most effective business model in the area of Luxury sector management. It is argued that application of Luxury technology will help to enhance the designer brand management paradigm in both local and the global Luxury markets.

Biodiversity as insurance: from concept to measurement and application.

ABSTRACTBiological insurance theory predicts that, in a variable environment, aggregate ecosystem properties will vary less in more diverse communities because declines in the performance or abundance of some species or phenotypes will be offset, at least partly, by smoother declines or increases in others. During the past two decades, ecology has accumulated strong evidence for the stabilising effect of biodiversity on ecosystem functioning. As biological insurance is reaching the stage of a mature theory, it is critical to revisit and clarify its conceptual foundations to guide future developments, applications and measurements. In this review, we first clarify the connections between the insurance and portfolio concepts that have been used in ecology and the economic concepts that inspired them. Doing so points to gaps and mismatches between ecology and economics that could be filled profitably by new theoretical developments and new management applications. Second, we discuss some fundamental issues in biological insurance theory that have remained unnoticed so far and that emerge from some of its recent applications. In particular, we draw a clear distinction between the two effects embedded in biological insurance theory, i.e. the effects of biodiversity on the mean and variability of ecosystem properties. This distinction allows explicit consideration of trade‐offs between the mean and stability of ecosystem processes and services. We also review applications of biological insurance theory in ecosystem management. Finally, we provide a synthetic conceptual framework that unifies the various approaches across disciplines, and we suggest new ways in which biological insurance theory could be extended to address new issues in ecology and ecosystem management. Exciting future challenges include linking the effects of biodiversity on ecosystem functioning and stability, incorporating multiple functions and feedbacks, developing new approaches to partition biodiversity effects across scales, extending biological insurance theory to complex interaction networks, and developing new applications to biodiversity and ecosystem management.

Optimizing Stock Portfolio with Markowitz Method as a Reference for Investment Community Decisions

An investor who wants to invest by avoiding risk makes investors tend to choose investments with the same expected return and the smallest or lowest possible risk. Therefore, investors expect to be able to maximize profits and minimize risk at the same time in investing. In a stock portfolio, it can be done by investing the funds owned by investors into several stocks so that it can reduce the risk of losses that will occur simultaneously. In choosing the right company to invest in with consideration of expected return and risk, a multi-objective optimization with multivariate objects can be used so that it can meet the expectations of investors. The portfolio concept introduced by Markowitz is a portfolio optimization intended for standard investors because it only refers to one explanation of portfolio returns. The Markowitz method can produce an optimal stock portfolio by considering the expected return and risk simultaneously so that the maximum profit can be obtained without eliminating the existing risk.

Pricing real options based on linear loss functions and conditional value at risk

The main purpose of this paper is to expand real option analysis out of the realm of pure financial option pricing techniques. To overcome many of the well-known concerns by adopting the financial option pricing techniques for modeling real options problems such as replicating portfolio concept, geometric Brownian motion as underlying stochastic process, and estimating project volatility, we propose an alternative real option valuation based on the loss function approach. The option value determined by the loss function approach is equivalent to the expected value of perfect information (EVPI) in decision analysis. It basically sets the upper bound of risk premium to pay in retaining the options. In practice, many firms utilize the concept of Value at Risk to manage their portfolio risk. If a firm sets a target VAR, then we may be able to link this VAR in refining the actual risk premium to pay in hedging the risk embedded in the investment. With this practice in mind, we present a logic to figure out an appropriate amount of real option premium to pay for a given level of risk tolerance. A comprehensive example is presented to demonstrate the computational procedures as well as economic interpretations on the outcomes.

Event portfolio management: An emerging transdisciplinary field of theory and praxis.

The phenomenon of event portfolio has gradually received acceptance and recognition as host destinations are steadily moving towards assembling multiple events across the calendar to serve multiple policy purposes. This paper reviews all the pertinent literature providing a common ground for studying event portfolios and their management exigencies. It traces the origins of the event portfolio concept and outlines its evolution to date. It thus, maps out event portfolio management as a complex emergent field, establishing its ontological base through convergence of underlying disciplines, theories and concepts. We argue that the integrative nature of event portfolio provides a malleable ground, one across and beyond its parent disciplines that shape it as a transdisciplinary field. This theoretical underpinning is indispensable for the effective treatment and sustainable development of the field.

MANAGEMENT OF BRANDS’ PORTFOLIO POSITIONING OF DOMESTIC ENTERPRISES

Introduction. Nowadays, the development of the economy of Ukraine is a demonstration of the trend towards globalization and the necessity for enterprises, including greater understanding, to give more nutrition to the form and brand development.Hypothesis of scientific research. The management of brands’ portfolio positioning should not be based only on trademarks, which belong to an enterprise, but also on the construction of molecule of brands portfolio, which affect on the decision of the consumer independently of holding them, that allows the increasement of the validity of proper brand in the eyes of consumer.Aim of this research is the extension of the theoretical foundations and the development of science-and-practical recommendations, which is followed by the complete management of the brand portfolio.Methods of investigation: The following tools: (goal setting, information and marketing communications; marketing research); models, methods and techniques (traditional methods of statistics, analysis, marketing) modeling; model of brand code and mental fields according to T. Ged; naming techniques); the method of generalization of information, the result of which is the development of the brand / brands, the formation of the portfolio; formation of a brand beech were used in the study.Results of research. Based on the analysis of portfolio concepts in brand management, the essence of the brand portfolio as a set of brands that make up the brand carrier and affect the associated position in the perception of the consumer, regardless of ownership of the company is precised. The meaning "brand carrier" refers to a product, brand, enterprise, organization, person or character associated in the minds of consumers with a certain distinctive quality.Conclusions: Approaches to the formation of brand portfolios, which can be centric (based on the hierarchy of brands and based on systems / networks of brands) and invariant – based on the "molecule" of the portfolio. The model of the organization of management of a brand which includes principles, the purpose, tasks, essence of management and directions of works is formed. Systematized principles of brand management, which we divide into general and specific. Methodical approaches to brand management on the basis of brand positioning are studied, it is established that the method of brand management on the basis of brand positioning should be understood as a way of its practical implementation, then the method is a set of methods and techniques of its appropriate application.

Sustainabilty integration in product portfolio for sustainable development: Findings from the industry

AbstractMany companies decide which services, products, and technologies to include in their product portfolio using evaluation criteria, which often consider cost, quality, risk, revenue, time, and market position. Incorporating sustainability in the portfolio evaluation criteria could ensure the development of sustainable solutions from the early stages of the product development process, where there is more room for innovation. The aim of this paper is to understand how sustainability can be integrated in the company portfolio development. Semi‐structured interviews were performed with experts in the field and representatives from multinational manufacturing companies with operations in Sweden. Main findings from this study include a proposed definition of a sustainability product portfolio concept and suggested portfolio evaluation criteria from an industry perspective. Future research will develop a method to guide manufacturing companies in sustainability integration and implementation in product portfolios.

Generalized Compounding and Growth Optimal Portfolios: Reconciling Kelly and Samuelson

We generalize the Kelly criterion and the growth-optimal portfolio (GOP) concept beyond log-wealth maximization. We show that models of speculative price dynamics with time change require different compounding algebras leading to GOPs that do not coincide with log-wealth maximization. In particular, in the Variance Gamma (VG) and the Normal Inverse Gaussian (NIG) models the GOP concepts mimick well-known utility models, namely power utility and the mean variance approach, with a parameter that, in both cases, is the variance of the stochastic clock. The standard log-wealth maximization model is obtained if the variance of the stochastic clock is set to zero.

FROM SILO APPROACH TO RISK PORTFOLIO MANAGEMENT – A NEW WAY OF ANALYZING RISK IN AN ENTERPRISE

The paper presents the concept of risk portfolio management – a holistic approach to risk analysis. It summarizes current state of knowledge regarding examined topic. Assessment of the suitability of portfolio management approach in the enterprise risk management was based on review of the subject literature. The author makes an attempt to confirm the hypothesis of risk portfolio management being a necessary and key part of proper enterprise risk management. The first section of the article provides a brief overview of the evolution of risk management. In the succeeding sections, descriptions of two latest risk management approaches: the traditional, silo risk management and the Enterprise Risk Management (ERM) approach are followed by a presentation of the risk portfolio management concept, which is compared to stock portfolio management. The paper focuses on the kinds of dependencies between certain risks which should be particularly considered and the ways in which portfolio analysis can be used to enhance a company’s understanding of its risks and enable it to make better management decisions. The last section of this paper presents potential effects of the implementation of the portfolio approach, focusing on benefits of portfolio management in a company’s activities.

Using Natural Disturbance and Portfolio Concepts to Guide Aquatic–Riparian Ecosystem Management

The U.S. Forest Service and other federal land managers are responsible for maintaining the productivity of aquatic–riparian ecosystems, the associated native biota, and the ecosystem services they provide. These public lands are important sources of water, recreation opportunities, and habitat for a suite of animals and plants, including many that are protected under the Endangered Species Act. To meet these challenges and responsibilities, recent science suggests modifying practices to provide a broader array of habitat, biological conditions, and ecosystem functions than are associated with traditional management approaches. We suggest that by linking approaches based on natural disturbance and portfolio concepts, managers can achieve a robust strategy and desired outcomes more reliably and cost effectively. Locally complex habitat conditions created by natural disturbances provide the template for biological diversity to play out if provided enough time. Accordingly, natural disturbance regimes play an important role in creating and sustaining habitat and biological complexities on the landscape, suggesting that, to the extent possible, management actions should emulate natural disturbance processes at appropriate spatial and temporal scales. In concert with this approach, the portfolio effect (i.e., diversity that mitigates risk) provides justification for promoting connected heterogeneous habitats that reduce the risk of synchronous large‐scale population and ecosystem collapse. In this article, we describe how disturbance and portfolio concepts fit into a broader strategy of conserving ecosystem integrity and dynamism and provide examples of how these concepts can be used to address a wide range of management concerns. Ultimately, the outcome for populations, habitats, and landscapes depends on how well environmental change is understood, the degree to which change is appropriately addressed by natural resource managers, and solutions that allow populations and ecosystems to persist in the presence of and be resilient to a growing scope of human influences.

Definition and application of activity portfolio and control/influence approaches in organizational life cycle assessment

Abstract Recently, following an increasing demand from companies to understand and monitor the potential environmental impacts of their activities, from a life cycle perspective, organizational life cycle assessment has been introduced. Only a few instances of its application have been published in the literature, and they mainly focus on one single environmental aspect. The application of organizational life cycle assessment in the case of a special purpose entity, created to build a tourist village in Italy, is presented and discussed in this paper. Requirements of ISO/TS 14072 and the guidelines published by the UNEP were considered. To overcome the limits related to the goal and scope Definition that have emerged from the literature, the activity portfolio concept was introduced along with the control and influence approach, according to ISO 14001. Sensitivity analysis was performed in order to discuss different energy use profiles of the village and the application of control and influence approach to the special purpose entity. The environmental impacts were concentrated in the first two years because of the importance of executive design activities; this included the impacts of the use stage that are mostly influenced by the decisions of the organization. The construction activities also contributed significantly in most of the impact categories. Results of the study proved the applicability of the introduced methodological proposals to special purpose entities in the construction sector and that results of organizational life cycle assessment can be consistent with results of product-based life cycle assessment. The activity portfolio concept and the representation of control and influence were useful for understanding the environmental hotspots and the activities of the organization that needed improvement in order to minimize environmental impacts.

Fostering self-regulated learning with portfolios in schools and higher education

The portfolio is often described as an approach effective for the fostering of self-regulated learning in different educational areas. The processes of planning, documenting, and reflecting on individual learning activities are core issues of the portfolio approach. Two aims of the use of portfolios in education are discussed in this contribution. First, the enhancement of self-regulated learning and learning competencies is an important topic. Second, aspects of evaluation and assessment through the use of portfolios are discussed. In this context, the application of portfolios may be seen as an example of a shift from teacher-based instruction to student-centered learning. However, up to now, there has been a lack of empirical evidence regarding these assumptions. In this contribution, three studies are presented that focus on portfolio implementation for the fostering of self-regulated learning in schools, teacher education, and higher education. Central theoretical aspects of the portfolio concept and empirical designs of the studies are described.

Technology Portfolios

Although people today regularly use a wide range of digital technologies for communication, information management and entertainment purposes, academic research has no conceptual way to describe this collection. This research seeks to answer 2 questions: 1) How well does the ?portfolio? concept describe the collection of technologies that individuals routinely use?, and 2) How do individuals manage technology portfolios over time? To answer these questions, data was gathered data using a multi-method qualitative design from technically-adept participants. Each participant had assembled a collection of technologies. We compared their technology selection and usage against five characteristics of a financial portfolio (purposeful, diverse, dynamic, balanced and holistic) and found many similarities and some differences. Using inductive analysis, a technology portfolio lifecycle containing five processes (Scan, Research, Trial, Use, and Retire) was developed. The paper concludes with a call to researchers to further develop the technology portfolio concept and to vendors and organizations to consider the ways that technologies are researched, trialed and integrated into a portfolio to increase chances for successful change.

Organization of tasks distribution by departments of project-oriented university

The tool maintenance is developed for organization of tasks distribution by departments of project-oriented enterprise, which includes: concept, fundamental structure of the information description of tasks in accordance with the project approach, ensuring the distribution of tasks for temporary periods. Methodical approach to identify the tasks of project-oriented university is developed on the basis of the use of business portfolio concept, decomposition method and index system by the example of the educational activities of universities. At the same time all the tasks are divided into two categories depending on their nature and the presence of uniqueness - standard and specific, allowing to better organize their accounting and can be used to assess the degree of formation of project-oriented university in the proposed measure. The concept of tasks distribution by departments in the system of project-oriented enterprise is formulated. This concept provides the organization of tasks performing with clear structuring objectives, time constraints and the necessary results for each task by a) systematic review of tasks within the network project models, b) integrated consideration of network models corresponding university projects portfolio. Tool maintenance of organization of tasks distribution by departments on the basis of approach to identification of tasks in accordance with the stated concept is developed in terms of set theory.

On the Behavior of Entrepreneurial Factor Supply to the Firm

This paper draws on an existing, but little used, approach to the choices governing the supply of ‘entrepreneurial’, in the sense of ‘residually remunerated’, resources to an enterprise, especially post start up. It focuses in particular on the hybrid ‘own factor demand/supply curve’ to the firm of Bronfenbrenner (1960), but attempts to treat such supply in conjunction with ‘contractual’ employment of resources, thus making use of gearing and portfolio concepts. To achieve this, it is found necessary for the hybrid schedule to be reinterpreted and recast as the locus of the relevant utility maximising choices. A model is presented which features combining all productive resources in a single factor F so as to concentrate on the choice between the entrepreneurial and contractual employment of these. The model identifies a variety of possible entrepreneurial resource supply responses to product market signals, including the possibility of divergence from the ‘normal’ expectation of a monotonically upward sloping supply curve. Such ‘unexpected’ behaviour is seen as rational and consistent, both with the needs of survival in distress and of safeguarding gains in the upside. Hence it is also efficient on welfare grounds. Analogies with the backward bending labour supply model and with risk/return choices in finance are pursued. The policy implication is that greater use of equity, especially in start ups and distress situations, should be encouraged.

Modeling Dynamic Procurement Auctions of Standardized Supply Contracts in Electricity Markets including Bidders Adaptation

<p>Descendant Clock Auctions have been increasingly used in power markets. Traditional approaches are focused on discovering the bidders’ best response but neglecting the bidders’ adaptation. This paper presents an algorithm based on decision theory to estimate the bidders’ behavior along the auction. The proposed model uses portfolio concepts and historical data of spot market to estimate a long term contract supply curve. This model was applied to evaluate the Colombia’s Organized Market (MOR). Demand curve parameters and round size were varied to evaluate their impact over auction outputs. Results show that demand curve has a quite small impact over bidders’ decisions and round size management is useful to avoid non-competitive bidders’ behavior. In addition, it is shown that auction’s starting prices strongly influence auction’s clearing prices. These results are extremely helpful to design market structures in power markets.</p>

The portfolio concept in ecology and evolution

Biological systems have similarities to efficient financial portfolios; the emergent properties of aggregate systems are often less volatile than their components. These portfolio effects derive from statistical averaging across the dynamics of system components, which often correlate weakly or negatively with each other through time and space. The “portfolio” concept when applied to ecological research provides important insights into how ecosystems are organized, how species interact, and how evolutionary strategies develop. It also helps identify appropriate scales for developing robust management and conservation schemes, and offers an approach that does not rely on prescriptive predictions about threats in an uncertain future. Rather, it presents a framework for managing risk from inevitable perturbations, many of which we will not be able to understand or anticipate.

Coalition portfolios and interest group influence over the policy process

An interest group coalition exists whenever two or more interest groups collaborate in advocating their public policy agendas. Working together in coalition is one of the most common tactics that interest groups use to advance their interests in the policy process. The extant literature on coalitions emphasizes interest group decisions to participate or not in one coalition, or their strategy toward coalitions in general, but gives insufficient attention to interest group participation in multiple coalitions. To rectify this deficit, this article examines the implications of groups’ participation in multiple coalitions for their ability to influence the policy process. In order to account for interest group involvement in multiple coalitions, we introduce the concept of the coalition portfolio, which is the set of all coalitions within a given area of public policy in which an interest group participates at a particular point in time. The portfolio concept recognizes that interest groups may have a wide variety of coalition strategies depending on the mix of coalitions that they join. Variations in the structure of these portfolios matter both to interest groups and to policymakers. Moreover, coalition portfolios evolve over time as coalitions form and dissolve, and as political conditions adjust over the course of the policy process. We develop and test hypotheses that the change in the composition of coalition portfolios increases the influence of interest groups over public policy when: (i) the number of coalitions in a group’s portfolio gets larger; (ii) the average size of the coalitions in a group’s portfolio gets larger or smaller; and (iii) a group’s portfolio improves its position within the overall network of coalitions. Network position is measured based on the betweenness of interest groups in coalition networks, which gives higher scores to groups that lie on the shortest paths between other groups. We test these hypotheses while accounting for other explanations for interest group influence, including: (i) the group’s position in communication networks; (ii) the group’s number of registered lobbyists working on Medicare; (iii) whether or not the group has a Political Action Committee; (iv) the extent to which a group’s lobbying contacts lean toward one political party; (v) whether or not the group endorsed the legislation in question; (vi) the organization’s age in years; and (vii) whether the group is a citizens advocacy organization, a business advocacy organization or some other organizational type. We evaluate these hypotheses using a study of 115 interest groups involved in the enactment and implementation of the Medicare Modernization Act of 2003. This legislation established an outpatient prescription drug benefit in Medicare – a government health insurance program for the elderly and disabled in the United States – and made other significant changes to the program. We conducted personal interviews with representatives of 102 of these groups. We analyzed data resulting from these interviews using negative binomial and ordinary least squares regression models. The results support Hypothesis (iii); groups gain influence over the policy process when their coalition portfolios increase the extent to which they are situated between other groups in the coalition network. However, interest groups are limited in the extent to which they can create portfolios that have desirable levels of betweenness because network position is also a function of membership decisions made by all other groups in the network. These results provide insight into how the composition of coalition portfolios affects the ability of interest groups to exert influence over the policy process. This analysis is most directly applicable to policy debates over complex pieces of legislation.