product portfolio (session 5)

8/8/2019 Product Portfolio (Session 5)

1/14

44Product PortfolioProduct Portfolio


2/14

Brings all your PLCs togetherBrings all your PLCs together

Helps setHelps set broadbroad strategic objectives (Build, Hold,strategic objectives (Build, Hold,

Harvest or Divest)Harvest or Divest)

Checks for balanced portfolioChecks for balanced portfolio Allows comparison of strengths v. competitorsAllows comparison of strengths v. competitors

Guides flow of resourcesGuides flow of resources

A simple and effective presentational methodA simple and effective presentational method

Product portfolio analysisProduct portfolio analysis


3/14

Designing the BusinessDesigning the Business

PortfolioPortfolio

Analyzing the Current PortfolioAnalyzing the Current Portfolio

SBUSBU It is a company within a companyIt is a company within a companyThe business is differentiated fromThe business is differentiated from

the rest of the companythe rest of the company It has its own set of competitorsIt has its own set of competitors It is a separate profit centreIt is a separate profit centre


4/14

TheThe Boston Consultancy GroupBoston Consultancy Group

MatrixMatrix

Mark

etGrowth

Rat e

Relative Market Share

QuestionMarks

DogsCash Cows

Stars

?A50%

B25%

C15%

D10%

High

Low

High Low

h l i


5/14

Cash Flows Across BusinessesCash Flows Across Businesses

in thein the

BCG Portfolio ModelBCG Portfolio Model

Growth

rate(c

ashus

e)

High

Low

Stars

Cash cows Dogs

Question

marks

High LowRelative market share

Desired direction of business development

Cash

Flows


6/14

AnsoffAnsoff

Ansoff says there are fourAnsoff says there are four

strategies for growing astrategies for growing a

business.business.Lets consider their meritsLets consider their merits

and drawbacks.and drawbacks.


7/14

Ansoff Growth Matrix.Ansoff Growth Matrix.

Existing

New

Existing NewProduct

Market

Market

Penetration

New Product

Development

Market

ExtensionDiversification

And there is a 5th

Option:

Increase

Productivity


8/14

Alternative Corporate GrowthAlternative Corporate Growth

StrategiesStrategies

Market penetration strategiesMarket penetration strategies Increase market share Increase product usage

Increase frequency of use

Increase quantity usedNew applications

Product developmentProduct development

strategiesstrategies Product improvements Product-line extensions

New products for samemarket

Market developmentMarket development

strategiesstrategies

Expand markets for existingproducts

Geographic expansion

Target new segments

Diversification strategiesDiversification strategies Vertical integration

Forward/backward integration Diversification into related bus

(concentric diversification) Diversification into unrelated

businesses (conglomerate

diversification)

Current products New products

C

urren

t

m

arke

ts

New

marke

ts


9/14

The Generic Value ChainThe Generic Value Chain


10/14

SWOT AnalysisSWOT Analysis

StrengthsStrengths

WeaknessesWeaknesses

OpportunitiesOpportunitiesThreatsThreats


11/14

Opportunity and Threat MatricesOpportunity and Threat Matrices


12/14

Using5 Forces analysis to scan the

MICRO environment

IndustryIndustry

CompetitorsCompetitors

Intensity ofIntensity ofRivalryRivalry

BuyersSuppliers

NewEntran

ts

Substitutes

Threat ofThreat ofNew EntrantsNew Entrants

Threat ofThreat ofSubstitutesSubstitutes

BargainingBargaining

Power ofPower ofSuppliersSuppliers

BargainingBargaining

Power ofPower ofBuyersBuyers


13/14

5 Forces example:5 Forces example:

(Mobile phones)(Mobile phones)

Strong

Vodaphone

Reliance

Airtel

Weak

Cost of licenceHigh barrier to entry

Huge cost to 3G

New functions?

Strong

Customers have many

competing offers, some

including airtime,

some not.

Cheap deals through

Internet

Weak

NokiaMotorola

Ericsson

Competing strongly

For share of

Mature market

Medium

Customers returning to

land lines

Convergence with PDAs

Location technology


14/14

Porters Generic StrategiesPorters Generic Strategies

Overall cost leadershipOverall cost leadership

Product DifferentiatorProduct Differentiator

FocusFocus

product portfolio (session 5)

Documents