Reference no: EM132634466

Samuel Enterprises had started producing and selling liquor in 1980 and gradually expanded its business to include manufacture of chemicals for pharmaceutical companies as well as construction work. With three differrent divisions ,there was a clear change noticeable after 1991 in their sales performance profitability . Earlier , 60 p.c of sales revenue was from liquor business mostly because of the brand loyalty and market reach , while the share of other two divisions was about 20 p.c each . While the market for liquor was gradually shrinking due to prohibition in many areas , sales of chemicals had an uncertain potential due to the expansion of Indian producers nd entry of multinational companies and introduction of new technology.The construction industry on the other hand had a high growth potential due to emphasis on infrastructure development as a part of government economic policy. However, construction indutry needs huge investments. Thus, the company wanted to hive off two of the divisions and focus on developing of just one division. The managing director was on favour of undertaking and excercise in portfolio analysis for a strategic decision. However, some non-executive directors were of opinion that analysis of division-wise capabilities was also necessary besides using any portfolio matrix model before arriving at a strategic decision.

Question:

1. Comment on the suggestions of MD and other directors giving reasons for against their respective views.(Emphasis on resource based view and market focused view towards strategy formulation).