Effective product portfolio management requires a systematic approach, but in many companies, each department develops their own product strategy, resulting in a lack of consistency across the company.
To address these challenges, product portfolio management must be carried out in the following steps:
Market growth rate and market share analysis (portfolio analysis)
Classifying each business (portfolio optimization)
Formulate a management resource strategy (portfolio planning)
Periodic review (portfolio governance)
Each step will be explained separately.
Market growth rate and market share
Analysis (portfolio analysis)
The first step in product portfolio management is to analyze both the macro environment and the market environment.
First, in the macro-environment analysis, we use the PEST (political, economic, social, technological) framework to understand changes in the external environment whatsapp number list surrounding our business. For example, we analyze how regulatory trends, economic growth rates, demographic trends, technological innovations, etc. will affect our company’s product lineup.
Next, the market environment analysis involves collecting and analyzing more detailed market data.
Market size and growth rate
Characteristics of each market segment
Market shares and trends of major players
Threat of new entrants
Changing customer needs
Through these potential impact on specific areas of marketing analyses, we are able to accurately understand the competitive environment and market position of each product.
Classifying each business (portfolio optimization)
Based on the results of the macro and market environment analysis, the next step is to classify your company’s product lineup from a strategic perspective. In this task, select the one that best suits your company’s purpose from the four frameworks introduced above (BCG Matrix, Ansoff Matrix, GE Business Screen, and Innovation Ambition Matrix).
For example, if you belgium business directory want to consider the balance between existing and new businesses, the Ansoff Matrix, which focuses on the market and the novelty of the product, is appropriate. On the other hand, if you want to prioritize the balance between the profitability and growth of each business, the BCG Matrix would be effective.
If you need a more detailed analysis, consider using the
GE Business Screen, which provides a nine-quadrant assessment, or if you want to assess your portfolio from an innovation perspective, the Innovation Ambition Matrix can help.
The important thing is to use the selected framework to conduct a comprehensive evaluation, including the synergy effects and complementary relationships between products. Through this classification, you will be able to clarify areas where you should strengthen your investment, areas where you should maintain the status quo, and areas that require review, and you will have a basis for considering the allocation of management resources, which is the next step.
