Product portfolio management is the process of making decisions about which products or services to offer, and how to allocate resources among them. The goal is to maximize the company's profits or shareholder value.
There are various approaches to product portfolio management, but the basic idea is to choose a portfolio of products or services that will maximize the company's profits. This usually involves trade-offs among different objectives, such as market share, profitability, growth potential, and risk.
There are a number of factors to consider when making decisions about the product portfolio. These include the company's financial resources, the market opportunity, the competition, the company's strengths and weaknesses, and the products or services themselves.
The portfolio management process usually begins with an evaluation of the current portfolio. This can be done using a variety of methods, such as financial analysis, market research, or customer surveys. Once the current portfolio is understood, the company can then develop criteria for evaluating potential new products or services.
Once the evaluation criteria are established, the company can then begin to screen potential new products or services. This step usually involves a review of market data, financial projections, and other information about the product or service. After the screening process, a company will typically choose a few products or services to move forward with.
The final step in the process is to develop a plan for launching and marketing the new products or services. This plan will include a budget, a schedule, and a list of objectives. The launch plan is typically developed by a team of marketing and sales professionals.
Product portfolio management is a complex process, but it is an important tool for companies to use in order to maximize their profits.