Product Portfolio Management

GROUP WORK 1

GIOVANNI MARCO BARBERIOMARINA NACCARATO

General Content in Product Portfolio Management

Agenda

PPM Introduction

Strategic Portfolio Management

Tactic Portfolio Management

Methods

Approaches in PPM

Conclusion

Portfolio Management

“there are two ways to win at new products: doing project right and doing the right

project”R. Cooper

Project selection

Resource Allocation

Control of :

risk/return,

maintenance/growth,

short-term/long-term time spans

Benefits of PPM

Only the right project will be selected

The entire enterprise as a whole is taken

into accountThere could be several portfolio

Issue and risk in PPM

Product Portfolio Management is not just selection of project from a set of project

Divestiture decision is necessaryNo methods that helps this activity in PPM

Issue and risk in PPM

Cannibalization: The process by which a new product gains sales by diverting sales from an existing product.

Strategic Portfolio Management

How resources are split across different kinds of project.

Two strategic methods:1) Strategic Buckets2) Strategic Roadmaps

Strategic Bucket

Strategic Roadmap

It ensures that the scheduled development project portfolio really contributes to the business strategy and goals.

Two main strategic roadmap: Product Roadmap Technology Roadmap

Product Roadmap Technology Roadmap

Strategic Roadmap

Tactical Portfolio Management

Individual Projects – Priorities – Resources

Two elements need to work together:

Stage-Gate® Process

Portfolio Review

Stage-Gate® Process

Individual Process Go/Kill Decision

Resources AllocatedBy Senior Management

Portfolio Review

Holistic

All project in auction Right Priorities? Right Mix? Sufficiency? Allignment? Resource Adequacy?

By Senior Management

Portfolio Management Goals

Maximizing the value of the portfolio NPV, ECV, Scoring Model

Achieving balance in the portfolio Risk-Reward Bubble Diagram, Pie Charts

Picking the right number of projects Pipeline Gridlock, Bubble Diagrams

Ensuring portfolio sufficiency versus development goals

Methods: PLC (Product Lifecycle )

• Different trend

• Helps firm to optimize its resources

allocation

• Helps divestiture decision

BCG Matrix (Boston Consulting Group)

Bubble Diagram

Seven type: Risk/Reward Newness Ease/Attractive Cost/Timing Strategic/Benefit Cost/Benefit

Scoring Model Checklist Model

Project scored on a scale

The total is given from the sum of each score

Some questions could be weighted

Based upon answering of a set of question

Project must obtain a certain number of “yes” to be approved

Scoring Model and Checklist Model

Approaches in PPM

Two Fundamental Approaches in PPM

The Gates Dominate

The Portfolio Review

Dominate

The Gates Dominate

The Portfolio Review Dominate

All projects are up for auctionMust Do’s identifiedWon’t Do’s killedOther PrioritizedResources are allocated

CONCLUSION

PPM is a vital topic among leading firmsPPM is not only selectionProblem of cannibalizationTwo main phase: Strategic Portfolio

Management and Tactic Portfolio Management

Several methods but not too much indication about which one using