Product portfolio management determines the innovation investments businesses will fund—and those they won’t—in order to achieve performance goals. For consumer goods firms, these investment options extend across the entire innovation lifecycle and include early-stage ideas, new product concepts, development or commercialization initiatives, and in-market products.
It is no overstatement to say that portfolio decisions determine how successful a business will be. In addition to directly impacting competitive strength and market position, studies have shown that organizations that excel at consumer goods product portfolio management not only deliver on expected revenues, but also enjoy an increase in profit margins of up to 19%.
This paper is the third in a series addressing the primary barriers confronting consumer goods firms in their efforts to achieve sustainable business growth. It focuses on four principles that manufacturers can use to effectively align corporate strategies with scarce resources, portfolio decisions and day-to-day innovation activity.