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Business Portfolio Analysis is a strategic tool used by companies to assess the performance and potential of various business units, products, or investments within their portfolio. The primary objective of this analysis is to determine where to allocate resources most effectively, identifying opportunities for growth, areas for improvement, or segments that should be divested. 

Business portfolio analysis typically involves evaluating two key dimensions:

1. Market Attractiveness - This dimension refers to external factors like market growth rate, competitive intensity, and overall profitability potential within a given market. It helps companies understand which markets offer the best opportunities for growth and return on investment for the foreseeable future. This is the outward view.

2. Business Strength - This dimension considers internal factors, such as a company's competitive position, market share, financial performance, and ability to generate sustained revenue in a particular business area.  This is the inward view.

One of the most commonly used tools for business portfolio analysis is the BCG Matrix (Boston Consulting Group Matrix), which categorizes business units or products into four groups based on their market growth rate and relative market share:

• STARS - Business units with high market growth and high market share. These are often prioritized for further investment because they are leaders in expanding markets.

• CASH COWS - Business units with low market growth but high market share. These are mature, profitable units that generate steady cash flow, which can be reinvested into other areas.

• QUESTION MARKS - Business units with high market growth but low market share. These require careful consideration to determine whether they can be grown into Stars or if resources should be redirected elsewhere.

• DOGS - Business units with low market growth and low market share. These typically underperform and may need to be divested or phased out to free up resources for more promising opportunities.

Other portfolio analysis frameworks, like the GE/McKinsey Matrix or SWOT Analysis, also help companies analyze different aspects of their portfolio based on market attractiveness, competitive strength, and strategic alignment.