Instructor’s Comments:

Comments on IP3

IP3 is very broad.    Here the word “portfolio” is not referring to a financial portfolio of bonds and stocks, etc.   It is referring to the business portfolio of HowRu

It owns a big market share of a seasonal business, so you want to talk about managing its business risk.

Diversification is the key.  So you need to define that.

You will need to decide how and where to diversify (other areas which are not that seasonal, or different patterns of seasonality), the 5 steps are the steps you take to make that diversification decision.

Once you have decided the diversification areas, you will need to invest in those areas.

The last question is about how you allocate your capital (new store? new shelf space? new employees? etc  )

Note: You can also use financial derivatives to diversify