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Product Mngt. Report

The document discusses product portfolios and different frameworks for analyzing them. It defines a product portfolio as the collection of all products and services offered by a company. Product portfolios aim to optimize long-term growth and profitability by allocating resources effectively. Common analytical tools discussed include the BCG growth-share matrix, which categorizes products as stars, cash cows, question marks or dogs based on market share and market growth, and Shell's directional policy matrix, which evaluates products based on industry profitability prospects and a company's competitive capabilities.

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Gian Paulo Dela Cruz
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44 views12 pages

Product Mngt. Report

The document discusses product portfolios and different frameworks for analyzing them. It defines a product portfolio as the collection of all products and services offered by a company. Product portfolios aim to optimize long-term growth and profitability by allocating resources effectively. Common analytical tools discussed include the BCG growth-share matrix, which categorizes products as stars, cash cows, question marks or dogs based on market share and market growth, and Shell's directional policy matrix, which evaluates products based on industry profitability prospects and a company's competitive capabilities.

Uploaded by

Gian Paulo Dela Cruz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Understanding Product

Portfolios
PRODUCT PORTFOLIO
• A PRODUCT PORTFOLIO IS THE
COLLECTION OF ALL THE PRODUCTS OR
SERVICES OFFERED BY A COMPANY.

• IT COMPRISES OF ALL THE SET OF


PRODUCTS OFFERED RIGHT FROM THE
ONES THAT WERE LAUNCHED AND
OFFERED DURING THE INCEPTION OF
THE BRAND TO THE ONES THAT ARE
LAUNCHED CURRENTLY ALONG WITH
ONES THAT ARE IN THE PIPELINE.
The Concept of the Product Portfolio

• PURPOSE BEHIND DEVELOPING PRODUCT PORTFOLIO IS TO


ALLOCATE THE FIRM’S RESOURCES SO AS TO OPTIMIZE ITS LONG
TERM GROWTH AND PROFITABILITY.

• PRODUCT PORTFOLIOS WILL TEND TO BE DIFFERENT FOR MATURE


VERSUS YOUNGER GROWTH COMPANIES.

• THE CONSTRUCTION OF A PRODUCT PORTFOLIO WILL DEPEND


UPON THE OVERALL OBJECTIVES OF AN ORGANIZATION AND ITS
ATTITUDE TOWARDS THE BASIC TRADE – OFF BETWEEN RISK AND
RETURN
PETER DRUCKER’S 7 CATEGORY OF
PRODUCT PORTFOLIO ANALYSIS
STRENGTHS OF
THE COMPANY WEAKNESSES OF
THE COMPANY EITHER STRENGTH
OR WEAKNESS
• Today’s
breadwinner • Investments in
Managerial Ego • Developments
• Tomorrow’s • Sleepers
Breadwinner • Failures
• Yesterday’s
Breadwinner
FACTORS INFLUENCING THE PRODUCT
PORTFOLIO

• MARKET SHARE
• SALES
• PORTFOLIO ANALYSIS
THE BOSTON CONSULTING GROUP(BCG)
GROWTH – SHARE MATRIX

• THE BOSTON CONSULTING GROUP(BCG) GROWTH – SHARE


MATRIX WAS DEVELOPED BY BRUCE HENDERSON,IN THE
LATE 1960’S.

• IT IS AN ANALYTICAL TOOL USED TO ASSESS COMPANY’S


PRODUCT LINES. IT AIMS AT HELPING TH COMPANY TO
MAKE THE BEST POSSIBLE ALLOCATION OF ITS RESOURCES.
Quadrant 1 represents a product being introduced
into a market which is perceived to have high growth
potential. But as it has yet to perform successfully and
has only a low market share, it is regarded as a
QUESTION MARK.

Quadrant 2 represents a successful product with a


high market share in a rapidly growing market. It is
undoubtedly a STAR.

Quadrant 3 represents an established player in a


mature market. It has survived the shake – out and is
now benefiting from experience effects in a stable and
not particularly aggressive market. It has become a
CASH COW
BGC MATRIX DIAGRAM
Quadrant 4 defines the product in the decline phase.
There is a little or no market growth and the product’s
low share means that it lacks the cost advantages
enjoyed by cash cows. In BGC nomenclature it is DOG.
IMPORTANCE OF GROWTH – SHARE MATRIX

• IT REINFORCES THE INEVITABILITY OF CHANGE IMPLICIT IN THE PLC


CONCEPT

• IT UNDERLINES THE IMPORTANCE OF HAVING A PORTFOLIO OF


PRODUCTS AT DIFFERENT STAGES OF DEVELOPMENT

• IT REQUIRES FORMAL CONSIDERATION OF THE COMPETITION AND


THEIR RELATIVE STANDING.

• IT IS INTUITIVELY APPEALING AND SIMPLE TO IMPLEMENT


CONCEPTUALLY, DESPITE THE DIFFICULTY OF OPERATUONALIZING IT
IN PRACTICE.
SHELL’S DIRECTIONAL POLICY MATRIX

• SHELL’S DPM IS BASED UPON TWO KEY PARAMETERS :

COMPANY’S COMPETITIVE CAPABILITIES


PROSPECTS FOR SECTOR PROFITABILITY
THE DIRECTIONAL POLICY MATRIX
PROSPECTS FOR SECTOR PROFITABILITY

UNATTRACTIVE AVERAGE ATTRACTIVE


COMPANY’S COMPETITIVE CAPABILITIES

WEAK
AVERAGE
STRONG
THE DIRECTIONAL POLICY MATRIX

• BUSINESS SECTOR PROFITABILITY INCLUDES THE SIZE OF THE


MARKET, EXPECTED GROWTH, LACK OF COMPETITION, PROFIT
MARGINS WITHIN THE MARKET AND OTHER FAVORABLE POLITICAL
AND SOCIO-ECONOMIC CONDITIONS. ON THE OTHER HAND
COMPANY’S COMPETITIVE CAPABILITY IS DETERMINED BY THE SALES
VOLUME, THE PRODUCTS REPUTATION, RELIABILITY OF SERVICE AND
COMPETITIVE PRICING.

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