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Portfolio Management for New Products : 2nd Edition  - Elko Kleinschmidt

Portfolio Management for New Products

2nd Edition

Hardcover Published: 14th December 2001
ISBN: 9780738205144
Number Of Pages: 400

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In this fully updated edition of Portfolio Management for New Products, the authors present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio-investing for maximum long-term growth. With its field-tested, step-by-step framework, the book provides corporations and managers with the strategies they need to assess and realign their current R&D operations; determine which products are most worthy of resource allocation; design and implement a portfolio management process; maximize the value of their portfolios; and recognize and solve challenges as they arise.

This book will be an essential resource for any company whose profitability, and very existence, relies on the products it chooses to develop and the speed with which it brings them to the market.

About the Author

Robert G. Cooper is a professor of marketing at McMaster University. Founder of the widely employed StageGate product development process, he lives in Oakville, Ontario.

Scott J. Edgett is associate professor of marketing at McMaster University and director of the Product Development Institute. He lives in Ancaster, Ontario.

Elko J. Kleinschmidt is professor of marketing and international business and director of the engineering and management program at McMaster University. He lives in Ancaster, Ontario.

Exhibitsp. ix
Acknowledgmentsp. xiii
The Quest for the Right Portfolio Management Processp. 1
What Is Portfolio Management?p. 3
What Happens When You Lack Effective Portfolio Managementp. 4
A Roadmap of the Bookp. 6
Portfolio Management Is Vitalp. 7
Much Room for Improvementp. 9
Major Challenges for Portfolio Managementp. 10
Some Definitionsp. 13
Three Decades of RandD Portfolio Methods: What Progress?p. 15
Recent Advances in Portfolio Management Methodsp. 16
Where Portfolio Management Stands Todayp. 19
Major Gaps between Theory and Practicep. 20
Portfolio Management: It's Not So Easyp. 21
Requirements for Effective Portfolio Managementp. 23
What the Leaders Do: Three Goals in Portfolio Managementp. 26
Portfolio Management Methods: Maximizing the Value of the Portfoliop. 29
Maximizing the Value of the Portfoliop. 29
Using Net Present Value to Get Bang for Buckp. 29
Expected Commercial Valuep. 34
The Productivity Index (PI)p. 40
Options Pricing Theory (OPT)p. 42
Dynamic Rank-Ordered Listp. 43
The Dark Side of the Financial Approaches to Project Evaluationp. 45
Valuation Methods: Scoring Modelsp. 46
Developing and Using Scoring Modelsp. 56
Assessment of Scoring Modelsp. 68
Checklists As Portfolio Toolsp. 70
Paired Comparisonsp. 71
Value Maximization Methods: Summing Upp. 71
Portfolio Management Methods: Seeking the Right Balance of Projectsp. 73
Achieving a Balanced Portfoliop. 73
Bubble Diagramsp. 74
Variants of Risk-Reward Bubble Diagramsp. 79
Other Bubble Diagramsp. 92
Bubble Diagram Recapp. 95
Other Charts for Portfolio Managementp. 95
Balance: Some Critical Commentsp. 103
Portfolio Management Methods: A Strong Link to Strategyp. 105
The Need to Build Strategy into the Portfoliop. 105
Linking Strategy to the Portfolio: Approachesp. 106
Developing a New Product Strategy for Your Business--A Quick Guidep. 108
Moving to the Attack Planp. 119
Product and Technology Roadmapsp. 121
Strategic Buckets: A Powerful Top-Down Approachp. 123
Strengths and Weaknesses of Top-Down Approachesp. 129
The Special Case of Platform Projectsp. 133
A Variant on Strategic Buckets: Target Spending Levelsp. 135
Bottom-Up Approach: Strategic Criteria Built into Project Selection Toolsp. 136
Top-Down, Bottom-Up Approachp. 138
But How Much Should We Spend?p. 142
Summaryp. 144
Portfolio Management Methods Used and Performance Results Achievedp. 145
The Average Businessp. 145
The Best and Worst Performersp. 147
Satisfaction with Portfolio Management Methodsp. 148
The Nature of Portfolio Methods Employedp. 150
Popularity and Use of the Various Portfolio Methodsp. 155
Which Methods the Best Performers Usep. 158
Specific Project Selection Criteria Employedp. 159
Selecting Projects in Roundsp. 161
How Specific Portfolio Methods Performp. 162
The Benchmark Businessesp. 166
Conclusions and Advice from Our Practices and Performance Studyp. 168
Challenges and Unresolved Issuesp. 173
General Conclusionsp. 173
Specific Conclusions and Challenges Identified in Effective Portfolio Managementp. 176
Challenges and Issuesp. 185
Portfolio Management Is Not the Complete Answerp. 203
The Path Forwardp. 206
Data Integrity: Obtaining Reliable Informationp. 207
Types of Information Requiredp. 208
Marketing, Revenue, and Pricing Datap. 210
Manufacturing or Operations and Related Costsp. 228
Estimating Probabilities of Successp. 231
Estimating Resource Requirementsp. 236
Deal with Uncertainties: Sensitivity Analysis and Monte Carlo Simulationp. 242
Summaryp. 245
Making Strategic Allocations of Resources: Deploymentp. 247
In Search of the Right Portfolio Methodp. 247
Resource Allocation Across Business Units: The Methodsp. 248
Deciding the Spending Splits: The Strategic Buckets Modelp. 250
Strategic Buckets: A Step-by-Step Guidep. 251
Some Features of the Strategic Buckets Decision Processp. 265
Summaryp. 268
Making Portfolio Management Work for You: Portfolio Management and Project Selectionp. 269
Three Key Components of the Portfolio Management Processp. 269
Strategy: The First Key Driver of the Portfolio Management Process (PMP)p. 270
Gating: The Second Key Driver of the Portfolio Management Processp. 271
Portfolio Reviews: The Third Key Driver of the PMPp. 273
Two Fundamentally Different Approaches to a Portfolio Management Processp. 274
The Gates Dominate--An Overview of How It Worksp. 275
The Portfolio Review Dominatesp. 290
Pros and Cons of Approach 1 Versus Approach 2p. 300
In Conclusion: An Integrated Decision Systemp. 301
Designing and Implementing the Portfolio Management Process: Some Thoughts and Tips Before You Charge Inp. 303
Before You Charge Inp. 303
Defining the Requirementsp. 304
Designing the Portfolio Management Process--Key Action Itemsp. 310
Trial Installation and Adjustmentsp. 321
Implementation and Improvementp. 325
Winning at New Productsp. 331
Overhauling the New Product Processp. 333
Sample Gate 3 Screening Criteria (Scored)p. 341
NewPort Max Software: A Tool for New Product Portfolio Managementp. 345
The NewProd 3000 Modelp. 347
Reference Notesp. 349
Indexp. 365
About the Authorsp. 381
Table of Contents provided by Syndetics. All Rights Reserved.

ISBN: 9780738205144
ISBN-10: 0738205141
Audience: Professional
Format: Hardcover
Language: English
Number Of Pages: 400
Published: 14th December 2001
Country of Publication: US
Dimensions (cm): 23.5 x 15.8  x 3.2
Weight (kg): 0.61
Edition Number: 1
Edition Type: Revised