New product portfolio planning and management the pdma. Aug 08, 2009 the product portfolio planning process needs to ensure that the company is not just thinking a quarter or two ahead. An investment strategy applied to a personal or corporate portfolio that determines its general purpose and constraints. Product design portfolio darja osojnik introduction darja osojnik i am darja osojnik and i love my life. Introduction timm reiher oliver wight americas jerry shanahan oliver wight eame new product portfolio and project management can be one of the most challenging components to implement in the integrated business planning ibp process model. For example, to achieve their strategic objective of new product development to compete effectively in the market could be a portfolio program. In others, the underlying reason is that strategic planning and portfolio management are treated as independent processes, and the two are never truly tied.
Portfolio optimization helps you strategically manage your product portfolio to make the right investment. Product portfolio analysis and planning robert hale and. Of course, portfolio planning methods are not alone among management prescriptions in this respect. Product portfolio management provides a centralized rather than individual view of an entire suite of products against the prevailing marketplace for those products. A dog is a product with low growth and low market share. This research aims at facilitating the implementation of product portfolio. The executives must insist on multiyear product strategies and thinking, then monitor progress along the way. Strategic portfolio planning is the business process by which organizations determine the set of innovation and new product development npd investments they will fundand those they wontto achieve their business objectives. Should you invest in each product equally or emphasize just a few. Portfolio planning is a scrum activity to determine which projects to work on, in which order, and for how long.
The most successful companies running agile at scale share three common traits. Apr 25, 2009 the specific techniques used at many of these companies can make the product team want to run and hide whenever portfolio planning is mentioned, but this is a function of the techniques that are commonly used, and not the act of planning itself. Pdf effective portfolio management is vital to successful product innovation. Find out the steps involved in the portfolio planning process. The product line and product portfolio is used by large industries and all sales are done to large global oems. Integrated product portfolio and project management white paper. It portfolio planningusing excel jerry bishop the higher ed cio creative commons attributionnoderivs 3. Pdf product portfolio management best practices for new. Portfolio analysis for strategic productmarket planning, wharton school. When every product team marches to its own drummer, execution is difficult at best because there are too many moving parts going in too many different directions. Integrated product portfolio and project management white. Strong product planning is crucial for the company if any step fails, then the entire initiative might be doomed.
The portfolio composition is a function of the balance between cash flows. We decided to help you out with portfolio design templates, ideas, and inspiration for your portfolio. Many companies invest in question marks because market share is available. Key to the ibp process is a rolling 24 month integrated volumetric and financial plan one set of numbers that covers the product portfolio, demand and supply. Portfolio planning has never been more important or more daunting for investors. Product portfolio management managing a mix of customized and standardized products henrik jansson, lund institute of technology, lund university. Product portfolio management is a practice designed to manage all aspects of the products your company sells. An example of a strategic business unit is consumer health care products.
Portfolio management is typically used to achieve the following goals. The purpose of product portfolio planning silicon valley. Principles of product portfolio planning silicon valley. Brief overview of product and portfolio management figure 4 new product portfolio focus product and portfolio planning enables the business to take control of its future. Welcome to the world of product portfolio management. The lynchpin of innovation management product portfolio management is the link between business strategy and the actual investments being made in product development. A strategic business unit or sbu is a selfcontained planning unit for which discrete business strategies can be developed. An executive guide to integrated business planning 20 questions you should ask.
Margins and cash generated are a function of market share. Portfolio matrices have been widely pre scribed for the past two decades, yet they have not been tested in a scientific manner. Software product portfolio management department of information. In product software companies, together with product planning, release planning and requirements management, ppm is considered as one of the four business. Project portfolio makes it clear where the time is being allocatedand where the time is not allocated. Product portfolio management is one of the most crucial elements of the entire business strategy as it helps the company to attain its overall business objectives and plan the future line of products accordingly it works as a significant tool for the corporate financial planning of the firm and also for the investors conducting the equity research analyzing the return on investments. How should the new product rage, basic, be integrated into abb machines existing product portfolio. Product planning and management exhibit 2 product excellence driving company success through true product excellence.
Definition, strategies and examples product planning, by definition, is the strategizing process that spans from idea conception to product market launch. By planning growth, we can determine what course of action is necessary to achieve desired results. Implementing product portfolio management in multinational. Traditional portfolio management is focused on topdown planning with work laid out over long time periods, but agile portfolio management takes the concept of buildmeasurelearn cycles used by individual agile teams and applies it on a larger scale. Design for me is a sweet pleasure of estethic creation and rigid rational work at the same time. Review your product portfolio to make the right investments. A product portfolio manager may be responsible for allocating resources for optimal roi, identifying areas of improvement, and. Product roadmaps are central to what you do as a product manager. Companies achieve the best results when they adopt product portfolio management software to automate and accelerate the npd process. However, owning a product portfolio poses a problem for. Management is needed on all the three levels of a product portfolio. A product portfolio is the collection of all the products or services offered by a company. Discusses alternative approaches to product portfolio planning, including those of the boston consulting group, general electricmckinsey, and the pims program. The actual approach discussed is one in which product development is completely integrated with business strategy and customer needs are incorporated as part of the product portfolio plan.
An example of a product line is the full range of tylenol products, or overthecounter medicines. A typical product portfolio chart growthshare matrix of a comparative strong and diversified company market growth rate 25% 10% 4. A product portfolio may comprise of different categories of products, different product lines and finally the individual product itself. Enterpriseclass software as a service saas provides a centralized source of data and a single source of truth for each stage of the commercialization process from pipeline prioritization, capacity planning and roadmapping to execution, resource allocation. Aligning product portfolios with strategic plans sopheon.
Aug 07, 2018 a product portfolio is comprised of all the products which an organization has. Product portfolio analysis can provide nuanced views on stock type, company growth. The boston matrix is a popular tool used in marketing and business strategy. It is a constant combining and balancing different fields and interests with. This involves evaluating their performance, identifying risks and opportunities, prioritizing highvalue products, optimizing resource allocation across the portfolio and balancing the product mix among strategic buckets. Once a portfolio plan has been determined, investments. How should you allocate your limited marketing resources among them. Product portfolio management for new product development. Some of the portfolio designs can also be downloaded as templates which means you can use the design and layout to create your own portfolio from the file. January 01, 1982 a survey of 345 fortune industrial companies in 1979 shows that portfolio planning is becoming a popular method for managing the diversity of businesses within large organizations. Managing a portfolio of products what is product portfolio management. Depending on the product, a firm might decide on a number of different strategies for it. The ability to intelligently distribute resources and allocate budget requires extensive analysis and planning. In business, it is not good to be considered a dog.
The portfolio planning model template below helps you optimize your product portfolio by visually presenting the analysis. Product portfolio management managing a mix of customized and. Optimize product portfolio investments with business strategy. Various product portfolio models exist which help in the task of classifying products or services. One strategy is to build market share for a business or product, especially a product that might become a star.
Portfolio planning is a process that helps executives assess their firms prospects for success within each of its industries, offers suggestions about what to do within each industry, and provides ideas for how to allocate resources across industries. Product portfolio management brings plenty of benefits to companies who make it a part of their strategy. The boston matrix is a model which helps businesses analyse their portfolio of businesses and brands. The aim of this article is to provide reader with a comprehensive insight on the theories, empirical findings and models of product portfolio management ppm during new product development. Portfolio planning and corporatelevel strategy mastering. The quality of that growth in the form of profitability. The definitive guide to product portfolio management. A business with a range of products has a portfolio of products.
So all this begs the question of the purpose of product portfolio planning. Market strategy and portfolio planning create the foundation for product management, product marketing and sales execution at every level. Product portfolio and project management as part of an ibp process. Measure product value and portfolio performance on a frequent basis, spanning both portfolio planning and product development execution processes. Product strategies, which set the stage for selecting strategies for each of the remaining components of the marketing program, forms a leading edge of a positioning strategy. Many companies, especially larger companies, tend to view staff as interchangeable. Strategic portfolio planning optimize your product portfolio. Product portfolio management refers to the practice of managing an organizations entire product portfolio, which consists of all the products the organization has. Despite the described limitations of portfolio planning, most of the companies find portfolio. Examines how portfolio planning can be used in the processes of market selection and setting of business direction within a market. By displaying products or a portfolio of products in a matrix fashion, insight is gained into the strategic position of the products. There are a number of challenges with regards to marketing the new product both internally and externally that need to be covered by this thesis.
The product portfolio to be successful, a company should have a portfolio of products with different growth rates and different market shares. The portfolio s and programs were reorganized to form the portfolio and program hierarchy and efficient portfolio structures, utilizing peoplesoft tree functionality. Market strategy and portfolio planning why it leads to. Download portfolio planning model templates in pdf format. But every week i hear how product managers still struggle with planning, creating, and communicating a compelling roadmap.
The product portfolio planning process needs to ensure that the company is not just thinking a quarter or two ahead. A product portfolio manager may be responsible for allocating resources for optimal roi, identifying areas of improvement, and keeping the products aligned with the organization. Product portfolio analysis and planning for multiple new products, the task is identifying those new products that maximize success and margin relative to each other as shown below with the size of the bubble indicating net present value of the margin opportunity, while maintaining sufficient risk in the portfolio to achieve strong future growth. The specific techniques used at many of these companies can make the product team want to run and hide whenever portfolio planning is mentioned, but this is a function of the techniques that are commonly used, and not the act of planning itself. Project portfolio makes it clear where the time is being. Download portfolio planning model templates in editable format. You need managers for managing individual products, managing. Portfolio management is an important tool for retailers when making strategic decisions about product development and the allocation of company resources such as merchandising, assortment planning, advertising, and store labor. Typically, organizations executemanage the work through projects to deliver products, services or to. The purpose of this thesis is to answer the question. Whether mature or growing, product portfolio management is a proven method for prioritizing productspecific projects while optimizing resources. The product portfolio strategy must be matched to the right distribution, pricing, and promotion strategy. Boston matrix product portfolio model business tutor2u. Definitive guide to product portfolio management smartsheet.