Product portfolio management explained
Product portfolio management (PPM) is a term used to refer to a product management method. In product portfolio management, every product that a business offers is being examined in light of the business’s short-term, mid-term, and long-term targets. Product portfolio management is also intended to be a learning platform for future professionals in various fields, including business, cost efficiency, and others.
The Role Of Product Portfolio Management
An organization’s product portfolio management function is to provide overall administration for all of its products in its possession. The responsibility for the product portfolio will often fall under the purview of the product portfolio manager position.
In this position, the individual will have responsibilities such as allocating resource quotas to maximize return on investment (ROI), identifying areas where you may make improvements, and ensuring that the portfolio remains consistent with the organization’s strategic objectives.
Once a company has begun to grow and, as a result, its product lines have multiplied, the need for a product portfolio management position will arise. This is because the organization has moved from a single product requiring only a product manager to a range of products requiring monitoring. It is no longer merely tactical but also strategic to meet the requirement.
The Advantages of Product Portfolio Management
Product Portfolio Management Offers several Benefits. This more strategic perspective can track market trends and movements in real-time and foresee closing niches and new possibilities that are opening up.
Product portfolio management can examine the complete product portfolio of a company in conjunction with the changing market. This allows product portfolio managers to discover new priorities, reallocate resources, uncover gaps in the product catalog, and ultimately act to preserve and grow income streams. Product portfolio management should be a process that is both ongoing and dynamic.
Product Management vs. Product Portfolio Management
The Product Portfolio Manager’s responsibilities are more strategic when compared to those of the Product Manager.
Unlike product managers, who are only responsible for one product, product managers are responsible for multiple products. They fundamentally understand how these products interrelate from conception to development, anticipated market placement, and final product release.
How to Employ Product Portfolio Management
To put product portfolio management into good use, you should start by dividing your products into groups, or “boxes,” based on their prices, sales, etc. The portfolio will set a long-term goal, consider the risk and funds involved, and use all of this to balance the portfolio.
You can outsource all of that process into an automatic function to get transparent and objective information to empower your decision-making process.
Four main methods of product portfolio management are put to use in the market:
- Boston Consulting Firms Matrix
- On the ground portfolio analysis by McKinsey matrix
- Ansoff matrix
- Meiji & Tuff’s innovation ambitions matrix
The critical question is – what method should you be using? It all comes down to two main factors: your company’s size and nature.
You may find the GE/McKinsey Matrix method more practical if your company is more prominent. If you are a tech business, it would probably be best to try the Innovation Ambition matrix to meet your target. If you own a company with multi-cultural history, the BCG Matrix may be the most helpful tool for you. and finely. For a “normal” business, it will probably be best to go with Ansoff Matrix.