The approach uses the dimensions of environmental assessment and business strength assessment. The environmental measure is an identification of the industry’s life cycle. The business strengths measure is a categorisation of the corporations SBU’s into one of six possible competitive positions: dominant, strong, favourable, tenable, weak and non-viable.
RONA is the planning focus of the model and its basic concept is that a corporate portfolio must be balanced with regard to SBU life cycle balance, cash balance and attainment of corporate RONA goals. The more dominant, strong and favourable SBU’s there are, the better the portfolio.