This article will introduce several techniques for effective product portfolio management which are valuable to any company. After reading this article, you will have a clearer understanding of how product portfolio management is used to help grow the various divisions of any company.
What is Product Portfolio Management?
Product portfolio management (PPM) is the art and science of structuring your product or service offerings to match customer needs with business objectives. A good approach delivers superior products, boosts productivity, improves cooperation among business units, ensures fast-paced responses to change, and unites company resources.
Role of PPM
Effective product portfolio management has fostered out-performance of investments for over two decades, with PPM programs enabling industry leaders to boost revenue by 193%. Defending our products’ competitive position is one of the critical responsibilities of market managers. But if we want to provide an exceptional customer experience, we have to have a comprehensive understanding of demand versus supply patterns.
The Decision Making Pyramid
When making a decision, management factors all the pros and cons and weighs the value of making a change. The product portfolio reflects this type of decision-making through its pyramid-shaped form; at the top of the diagram is an idea, with successively smaller layers of grading by “vitality” (the potential for viability) and then by “complexity” (ease of execution).
8 Best Practices
- Properly manage your product portfolio to remain agile and competitive.
- Focus on core products that are still doing well.
- Consider closing out poor-selling products.
- Be strategic about new product launches, not frantic.
- Narrow the bandwidth of products so you can spend more time with the best opportunities.
- Ensure each product has a committed team behind it.
- Build empathy for retailers or distributors.
Answer these five questions before every major decision: What are the benefits? What are the risks? What contingencies need to be in place? Least-cost analysis? Is this sustainable over time?
Developing a process for selecting, designing, and acquiring new products
Some companies believe they are innovators and that they can invent new products to meet customer needs. However, product development takes time, money, and resources that may not be available. Companies should establish a process for selecting, designing, and acquiring new products. The first step is to analyze the company’s current portfolio of products. This will help determine which everyday items need redesign or replacement versus those that are doing well.
Ultimately, the goal is to have a manageable list of potential new products with an appropriate budget allocated for each project.
Extending life cycle products by initiating another generation
Product portfolio management is a term used to describe the process of analyzing and managing an assortment of products and their variations and the market and competitive conditions under which they will be sold. This allows companies to make strategic decisions about product offerings and sales focus. Companies need to keep their product lines fresh by requiring regular research and development, extending life cycle products by initiating another generation, refreshing existing models, or discontinuing them.
Customizing your portfolio to meet specific business needs
Customizing your portfolio to meet specific business needs is a great way to improve the efficiency of your organization. It allows you to organize better and prioritize your resources to match the skills and conditions of your team. This will help you get the best return on your investment in product management techniques, training, and other resources.
Bringing products to market quicker with less risk
You want to bring products to market quicker with less risk. The best way to do this is to have a team that understands the process of product management. They should have experience in market research, product design, project management, and other aspects of the process. If you don’t have anyone in your company who can fill these roles, hire an outside consultant or agency for help
Conclusion
Product Portfolio Management needs to be a part of the way we operate daily tasks, and for this, we need to think about it strategically with appropriate behaviors. The PM will then need to consider many factors, including: Demand, trends, customer data, past customer feedback, competitive activity and business objectives.