Fortune Brands, Inc. (www.fortunebrands.com), a leading
consumer brands company, today announced that it is exploring
strategic options for its ACCO World Corporation office
products unit.
The evaluation, which includes the possible sale of the office
products business, is a result of the company’s ongoing strategic
review of its portfolio of brands and businesses initiated earlier
this year. ‘This plan to narrow the focus of our consumer
products portfolio is a bold step in the evolution of Fortune
Brands and reflects our unrelenting commitment to sharply
increasing returns and enhancing shareholder value,’ said
Chairman and Chief Executive Officer Norm Wesley. ‘In 1999,
we delivered on that commitment with a series of aggressive
actions to reduce our cost structure and optimize operating
efficiencies. Earlier this year, we began an intensive strategic
review of our portfolio to ensure that Fortune Brands delivers
even stronger results for our shareholders in the years ahead.
‘Our aim in pursuing strategic options for our office products
unit is to promote two key long-term objectives: generating a
significant leap in our returns and strengthening our growth
profile by focusing on our most attractive markets. And in the
event of an office products divestiture, we expect that our nearterm
priority for the proceeds would be to immediately enhance
shareholder value with high-return share repurchases and debt
repayment, subject to market conditions,’ Wesley added.
‘ACCO is an industry leader that has made many important
contributions to Fortune Brands’ success over the years.
However, ACCO competes in an industry that will likely benefit
from consolidation and we don’t see ourselves making that kind
of commitment to office products. With its excellent brands and
great people, we’re optimistic that in the event of a divestiture,
ACCO will be a valuable building block for success in that
environment.’
Source: Business Wire (2000)
Dogs and other animals
The most famous portfolio analysis was devised by the Boston
Consulting Group (BCG). It is called the BCG matrix (see Figure 2.2)
and views an organisation’s products as either:
♦ dogs – low market share, little potential growth
♦ problem children (or question marks)– low market share, high
potential growth
♦ cash cows – high market share, low potential growth
♦ stars – high market share, high potential growth.