There is an absolutely great couple of books out there by Chris Zook around the Core of a business, and how manage it through innovation pressure. The books are available through Amazon.com and Amazon.co.uk.

I have used Zook's insights to develop a tool I call "Core Analysis". The tool yields recommendations for expansion strategies in different market scenarios, different investment styles, and different strategic intentions. All done in the most strategic of all applications, Microsoft Excel.

It attempts to understand the core along several fixed dimensions. From there, iterations of dimensions are being discovered and fleshed out. This creates a portfolio of strategic options.

In a second step, the options themselves are evaluated standalone, using a standard grid. This generates a rating (call it "attractiveness") for each options. I then weigh the ratings with the success rate based on distance from the core. This generates a weighted ranking of options, with the most attractive at the top and the least attractive on the bottom.

In a third step, the options then is sized in terms of economic value add. I am using a mixture of NPV and other values (such as market stability etc) to generate a set of profitability ratings. These are compiled into one Economic Value Add rating, which is combined with the attractiveness rating using a .

The last step is then to analyse the whole picture and run what-ifs on it. Here we play with some of the assumptions / parameters given at the start of the analysis ("are you risk-adverse or risk-tolerant", this kind of thing. We can now describe different investment portfolios under the light of basic attitudes towards the business. Great tool to understand the impact of fundamental leadership decisions.