Portfolio Management in Expansion:
Defining and Competing in New Product Markets
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Brad Barbera, NPDP
Director, New Product Development and Innovation
PartyLite, Inc.

Four Steps to Discuss Today
1. Research
2. Strategy
3. Portfolio Management
4. Execution

1. Research
“Look well into thyself; there is a
source of strength which will
always spring up if thou wilt
always look there.”
~Marcus Aurelius

Research – Internal
How do you currently define yourself?
How do your customers define you?
How do your competitors define you?
How do your business partners define you?
How do you want to be defined?

Research - External Porter’s
Five Forces
Potential Model
Entrants Analytical
Threat of Substitute
New Entrants
Tool
Industry
Bargaining
Power of Competitors
Suppliers Buyers/
Suppliers Bargaining
Power of
Customers
Buyers
Rivalry among
Existing Firms
Threat of Substitute
Product or Service
Substitutes

Research - External

2. Strategy
“Strategy without tactics is the slowest
route to victory. Tactics without
strategy is the noise before defeat.”
~Sun Tzu
Definition of Strategy
Chosen method of achieving stated objectives,
Chosenmethod of achieving stated objectives,
Chosen method of achieving stated objectives,
Chosen method
based on situational assessment and forecast.
based on situational assessment and forecast.

Common Objective:
Producing High Value
B
V = ×U
BxU
V=
C
C

Porter’s
Five Forces
Potential Model
Entrants Analytical
Threat of Substitute
New Entrants
Tool
Industry
Bargaining
Power of Competitors
Suppliers Buyers/
Suppliers Bargaining
Power of
Customers
Buyers
Rivalry among
Existing Firms
Threat of Substitute
Product or Service
Substitutes

Product Development Strategy
Fit. Value. Priority.

Expansion Strategy – Example
External Assessment
Internal Assessment

3. Portfolio Management
Top-Down
“Wisdom is your
perspective on life, your
sense of balance, your
understanding of how the
various parts and principles
apply and relate to each
other. It embraces Bottom-Up
judgment, discernment,
comprehension. It is a
gestalt or oneness, an
integrated wholeness.”
~Steven Covey

Top-Down Approach to Project Identification
Corporate Strategy Directs Innovation
Quantitative Qualitative Leverage Your
Research Research Business Partners!

Top-Down Approach to Project Identification
Ideation Techniques
“Brainwriting” “Role Playing”
Problem Statement: How to...
Idea 1 Idea 2 Idea 3
1
2
3
4
5
6

Bottom-Up Approach to Project Identification
“Chance favors the prepared mind.”
~Louis Pasteur

Bottom-Up Approach to Project Identification
Ideation Techniques for Bottom-Up Approach
“Suggestion Box” “Shopping”

Idea Screening and Selection – Delphi/Scorecard Hybrid
Innovation Project Scoring Sheet
For determining resource allocation against innovation projects
Team Rating (1-10) Weight Points
Strategic Alignment 20%
Does the project fit with product development strategy? 0
Is the project an important component of the product development strategy? 0
Competitive Advantage 20%
Does the product offer unique and perceivable benefits to the end user? 0
Does the product meet the needs of the end user better than other products? 0
Does the end user perceive this product as a good value for the price paid? 0
Is the product performance/benefit "ownable" (patent, trademark, etc.)? 0
Market Attractiveness 20%
What are the volume projections? 0
What are the production costs and profit margins? 0
How challenging is the competitive environment for this product? 0
Is the market for this product growing? 0
Core Competency Leverage 20%
Can the product be efficiently distributed? 0
Does the product lend itself to the skills of our sales force? 0
Can the product be sourced/manufactured efficiently? 0
Is there a strong technical understanding of the product and its manufacture? 0
Investment Analysis 20%
What is the probability of technical product development success? 0
What is the investment required for product development? 0
What is the probability of commercial success after launch? 0
What is the investment required for commercial success? 0
Does the expected return justify the required investment? 0
Total 100% 0

Idea Retention
Innovation Idea Library

Proposed Project Portfolio Balancing
Higher Probability of Success
Short Term Long Term
Medium Term
(Commercialization) (Discovery)
(Development)
Legend:
Size of Circle Indicates Relative Economic Value
Color of Circle indicates location of research work
●
Blue = Location 1
●
Green = Location 2
●
Orange = Location 3 Lower Probability of Success
●
Red = Location 4
●
Purple = Location 5

Proposed Project Portfolio Balancing
Higher Probability of Success
Short Term Long Term
Medium Term
(Commercialization) (Discovery)
(Development)
Legend:
Size of Circle Indicates Relative Economic Value
Color of Circle indicates location of research work
●
Blue = Location 1
●
Green = Location 2
●
Orange = Location 3 Lower Probability of Success
●
Red = Location 4
●
Purple = Location 5

Proposed Project Portfolio Balancing
I E R

Proposed Project Portfolio Balancing
I E R
I
E
R

4. Execution
This VS. This!
“However beautiful the strategy, you
should occasionally look at the results.”
~Winston Churchill

4. Execution
Objectives & Accomplishments Worksheet
Employee Name: __________________________________________
Objective Weight
Including time and success metrics
%
Benefit
Specific Link to Strategy
Interdependencies
Conscious cross-functional coordination