product development portfolio management in expansion
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DESCRIPTIONPresented 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.
- 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. Four Steps to Discuss Today 1. Research 2. Strategy3. Portfolio Management 4. Execution 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. 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. Research - ExternalPorters Five Forces Potential Model EntrantsAnalytical Threat of Substitute New EntrantsToolIndustryBargaining Power ofCompetitors SuppliersBuyers/Suppliers Bargaining Power of CustomersBuyersRivalry amongExisting FirmsThreat of SubstituteProduct or Service Substitutes 6. Research - External 7. 2. StrategyStrategy without tactics is the slowestroute to victory. Tactics withoutstrategy is the noise before defeat. ~Sun Tzu Definition of StrategyChosen method of achieving stated objectives, Chosenmethod of achieving stated objectives, Chosen method of achieving stated objectives,Chosen methodbased on situational assessment and forecast. based on situational assessment and forecast. 8. Common Objective:Producing High ValueB V = U BxUV=CC 9. PortersFive ForcesPotential ModelEntrantsAnalyticalThreat of SubstituteNew Entrants Tool Industry BargainingPower ofCompetitorsSuppliersBuyers/ Suppliers BargainingPower ofCustomers Buyers Rivalry among Existing Firms Threat of Substitute Product or ServiceSubstitutes 10. Product Development Strategy Fit.Value.Priority. 11. Expansion Strategy Example External AssessmentInternal Assessment 12. 3. Portfolio ManagementTop-DownWisdom is yourperspective on life, yoursense of balance, yourunderstanding of how thevarious parts and principlesapply and relate to eachother. It embraces Bottom-Upjudgment, discernment,comprehension. It is agestalt or oneness, anintegrated wholeness. ~Steven Covey 13. Top-Down Approach to Project IdentificationCorporate Strategy Directs Innovation Quantitative QualitativeLeverage YourResearch Research Business Partners! 14. Top-Down Approach to Project Identification Ideation Techniques Brainwriting Role PlayingProblem Statement: How to... Idea 1Idea 2Idea 3123456 15. Bottom-Up Approach to Project IdentificationChance favors the prepared mind. ~Louis Pasteur 16. Bottom-Up Approach to Project IdentificationIdeation Techniques for Bottom-Up Approach Suggestion BoxShopping 17. Idea Screening and Selection Delphi/Scorecard HybridInnovation Project Scoring Sheet For determining resource allocation against innovation projects Team Rating (1-10) Weight PointsStrategic Alignment 20%Does the project fit with product development strategy? 0Is 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? 0Does the product meet the needs of the end user better than other products? 0Does the end user perceive this product as a good value for the price paid? 0Is the product performance/benefit "ownable" (patent, trademark, etc.)? 0 Market Attractiveness 20%What are the volume projections?0What are the production costs and profit margins? 0How challenging is the competitive environment for this product?0Is the market for this product growing? 0 Core Competency Leverage20%Can the product be efficiently distributed? 0Does the product lend itself to the skills of our sales force?0Can the product be sourced/manufactured efficiently?0Is there a strong technical understanding of the product and its manufacture? 0 Investment Analysis 20%What is the probability of technical product development success? 0What is the investment required for product development?0What is the probability of commercial success after launch? 0What is the investment required for commercial success? 0Does the expected return justify the required investment? 0 Total 100% 0 18. Idea Retention Innovation Idea Library 19. Proposed Project Portfolio BalancingHigher Probability of SuccessShort TermLong Term Medium Term(Commercialization) (Discovery) (Development) Legend:Size of Circle Indicates Relative Economic ValueColor of Circle indicates location of research workBlue = Location 1Green = Location 2Orange = Location 3 Lower Probability of SuccessRed = Location 4Purple = Location 5 20. Proposed Project Portfolio BalancingHigher Probability of SuccessShort TermLong Term Medium Term(Commercialization) (Discovery) (Development) Legend:Size of Circle Indicates Relative Economic ValueColor of Circle indicates location of research workBlue = Location 1Green = Location 2Orange = Location 3 Lower Probability of SuccessRed = Location 4Purple = Location 5 21. Proposed Project Portfolio Balancing I ER 22. Proposed Project Portfolio BalancingIE R I E R 23. 4. Execution ThisVS.This!However beautiful the strategy, youshould occasionally look at the results. ~Winston Churchill 24. 4. ExecutionObjectives & Accomplishments WorksheetEmployee Name: __________________________________________Objective WeightIncluding time and success metrics %BenefitSpecific Link to StrategyInterdependenciesConscious cross-functional coordination