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Product Development Portfolio Management In Expansion

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Presented at the Strategic and Operational Portfolio Management Conference; February, 2007
Discusses strategic approach to expanding a product portfolio into new categories.
To fully understand the presentation, it is best to download it, open it up in PowerPoint, and view it in the "Notes View" format. Full speaker's notes are included, explaining what was discussed in each slide.

Published in: Business, Economy & Finance
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Product Development Portfolio Management In Expansion

  1. 1. Portfolio Management in Expansion: Defining and Competing in New Product Markets Please Note: The slides for this presentation are primarily graphical in nature. To fully understand the presentation, it is best to download it, open it up in PowerPoint, and view it in the "Notes View" format. Some speaker's notes are included there, explaining what was discussed in each slide. Brad Barbera, NPDP Director, New Product Development and Innovation PartyLite, Inc.
  2. 2. Four Steps to Discuss Today 1. Research 2. Strategy 3. Portfolio Management 4. Execution
  3. 3. 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
  4. 4. 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?
  5. 5. 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
  6. 6. Research - External
  7. 7. 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.
  8. 8. Common Objective: Producing High Value B V = ×U BxU V= C C
  9. 9. 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
  10. 10. Product Development Strategy Fit. Value. Priority.
  11. 11. Expansion Strategy – Example External Assessment Internal Assessment
  12. 12. 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
  13. 13. Top-Down Approach to Project Identification Corporate Strategy Directs Innovation Quantitative Qualitative Leverage Your Research Research Business Partners!
  14. 14. 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
  15. 15. Bottom-Up Approach to Project Identification “Chance favors the prepared mind.” ~Louis Pasteur
  16. 16. Bottom-Up Approach to Project Identification Ideation Techniques for Bottom-Up Approach “Suggestion Box” “Shopping”
  17. 17. 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
  18. 18. Idea Retention Innovation Idea Library
  19. 19. 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
  20. 20. 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
  21. 21. Proposed Project Portfolio Balancing I E R
  22. 22. Proposed Project Portfolio Balancing I E R I E R
  23. 23. 4. Execution This VS. This! “However beautiful the strategy, you should occasionally look at the results.” ~Winston Churchill
  24. 24. 4. Execution Objectives & Accomplishments Worksheet Employee Name: __________________________________________ Objective Weight Including time and success metrics % Benefit Specific Link to Strategy Interdependencies Conscious cross-functional coordination

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