Purpose
Plot every business unit or asset on a strategic fit × value creation matrix, overlay financial performance (ROIC, growth, margin), and convert the analysis into a defensible Hold / Invest / Divest / Partner recommendation per unit — ranked by value impact and sequenced into an execution roadmap the board can act on. Replaces gut-feel portfolio debates with a structured, financially grounded case.
When to Use
Invoke this skill when the user asks to:
- Rationalize or streamline a portfolio of business units, product lines, or assets
- Decide which businesses to divest, invest in, hold, or partner around
- Prepare a portfolio review for the board or an annual strategy offsite
- Evaluate a specific unit that's underperforming or absorbing disproportionate capital
- Build the analytical justification for a divestiture or bolt-on investment thesis
- Reallocate capital across a multi-business corporate structure
Inputs Required
Before starting, collect:
- Business units/assets: List of the units, product lines, or assets to evaluate (names + 1-line description each)
- Financial metrics per unit: Revenue, growth rate, EBIT/operating margin, ROIC (or best available return metric), capital employed
- Corporate strategy/thesis: The parent company's stated strategic direction and where it intends to win
- Strategic fit signals: For each unit — synergies with the core, shared capabilities, brand/customer overlap, cross-sell
- Market attractiveness signals: Market size, growth, competitive intensity, structural trends per unit
- Constraints: Regulatory limits, contractual lock-ins, employee/political sensitivities, minimum cash needs
- Time horizon: Planning window for the rationalization (e.g., 12 / 24 / 36 months)
If ROIC is unavailable, use ROA or operating margin as a proxy and flag the substitution. If a unit's strategic-fit inputs are thin, infer from the corporate thesis and note the assumption.
Instructions
Step 1: Score Each Unit on the Two Axes
Rate every unit 1–5 on each axis, with an explicit rationale.
Axis A — Strategic Fit (1 = peripheral, 5 = core to the thesis) Weight and score these sub-factors:
- Alignment with stated corporate strategy (40%)
- Shared capabilities / operating synergies with the core (25%)
- Customer and brand overlap / cross-sell potential (20%)
- Cost of separation vs. integration (15%) — high separation cost raises fit inertia, flag it
Axis B — Value Creation Potential (1 = value-eroding, 5 = value-compounding) Weight and score these sub-factors:
- Market attractiveness — size, growth, structure (35%)
- Competitive position — right to win in this market (30%)
- Return trajectory — ROIC vs. WACC, and direction of travel (35%)
Show the weighted composite for each axis to one decimal.
Step 2: Apply the Financial Overlay
For each unit, classify against three financial lenses and label the pattern:
- ROIC vs. WACC: Value-creating (ROIC > WACC), neutral (±1pt), value-destroying (ROIC < WACC)
- Growth: High (above corporate average), moderate, declining
- Margin: Above / at / below portfolio median Combine into a one-line financial signature per unit (e.g., "High growth, value-creating, sub-median margin — reinvest-to-scale profile").
Step 3: Place Each Unit in the 2×2 Matrix
Map composite scores onto four quadrants (split at 3.0 on each axis):
- High Fit / High Value → INVEST: Compound the winners. Prioritize capital, talent, and M&A bolt-ons here.
- High Fit / Low Value → FIX or HOLD: Core to identity but underperforming. Hold with a defined turnaround thesis, or divest if turnaround has no credible path.
- Low Fit / High Value → HARVEST or PARTNER/SPIN: Valuable but non-core. Extract maximum value via partnership, JV, or a well-timed sale at peak multiple.
- Low Fit / Low Value → DIVEST: Exit. Free capital and management attention.
Reconcile the quadrant call with the financial signature — where they conflict (e.g., high-fit unit destroying value), state which signal governs and why.
Step 4: Assign the Recommended Action per Unit
For each unit, deliver a decision block:
- Action: Hold / Invest / Divest / Partner (one word, no hedging)
- Rationale: 2–3 sentences tying the axis scores and financial signature to the call
- Value at stake: Directional capital freed, reinvested, or created (order-of-magnitude estimate)
- Key risk: The single biggest thing that could invalidate this action
- Trigger to revisit: The metric or event that would change the recommendation
Step 5: Rank by Value Impact
Order all recommendations by expected value impact (capital freed + return uplift + strategic clarity), highest first. Separate "act now" moves (clear, high-conviction) from "stage/watch" moves (dependent on triggers or timing).
Step 6: Build the Execution Roadmap
Sequence actions across the planning horizon:
- Phase 1 (0–6 months): Quick, low-dependency moves — clear divestitures, obvious reinvestments
- Phase 2 (6–18 months): Partner/JV structures, turnaround checkpoints, staged capital deployment
- Phase 3 (18+ months): Value-timed exits (sell non-core at peak), M&A bolt-ons around invest units For each phase, note capital flows (in/out) and the one decision gate that must clear before proceeding.
Step 7: Capital Reallocation Summary
Net the whole portfolio: total capital freed from divest/partner actions, total capital directed to invest units, and the resulting expected shift in portfolio ROIC. State the one-sentence strategic outcome of the full rationalization.
Output Format
- Structure: Per-unit scoring table → financial overlay → 2×2 matrix placement → per-unit decision blocks → value-ranked action list → phased roadmap → capital reallocation summary
- Length: 1,100–1,500 words
- Format: Structured document — scoring and financial signatures in tables, decision blocks as labeled bullets, roadmap as phased lists
- Sections: Axis Scoring → Financial Overlay → Matrix Placement → Recommendations (per unit) → Value-Ranked Priorities → Execution Roadmap → Capital Reallocation Summary
- Tone: Corporate development principal — analytical, decisive, board-ready; no hedging on final calls
Quality Checklist
Before delivering output, verify:
- [ ] Every unit has a numeric score on both axes with a stated rationale — no unit left unscored
- [ ] Each unit's financial signature explicitly references ROIC-vs-WACC, growth, and margin
- [ ] Every unit is placed in one of the four quadrants and assigned exactly one action (Hold / Invest / Divest / Partner)
- [ ] Conflicts between quadrant placement and financial signal are called out and resolved, not ignored
- [ ] Recommendations are ranked by value impact — not listed alphabetically or by unit order
- [ ] The roadmap sequences actions into phases with capital flows and decision gates
Notes
- The most common error is over-weighting emotional attachment to legacy units — the strategic-fit axis must reflect the forward thesis, not historical identity
- A high-fit unit that persistently destroys value (ROIC < WACC for 3+ years with no credible turnaround) should move toward Divest despite fit — capital discipline governs
- Non-core assets are usually worth most to someone else; recommend Partner/sell while performance is strong, not after it deteriorates
- When scores cluster near the 3.0 boundary, treat placement as provisional and lean on the financial overlay and revisit-triggers to break ties
How to use this skill
This file is a Claude Code skill in Anthropic's standard format — markdown with YAML frontmatter at the top.
Installing in Claude Code:
~/.claude/skills/<folder-name>/SKILL.md— auto-loads in every session anywhere on your machine (recommended for skills you'll use across multiple projects)<your-project>/.claude/skills/<folder-name>/SKILL.md— auto-loads only when working in that project (recommended for project-specific skills)
Restart Claude Code or open a new session to register.
Using in Claude.ai, ChatGPT, Gemini, or other AI tools:
- Drag this file into a new chat, or copy and paste its contents
- Send your task or request as your next message — the AI will apply the skill where it fits
For Claude Code skill details: https://docs.anthropic.com/en/docs/claude-code/skills