Portfolio Management for New Products / Edition 2

Portfolio Management for New Products / Edition 2

2.5 2
by Robert G. Cooper, Scott J. Edgett, Elko J. Kleinschmidt, Elko J. Kleinschmidt

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ISBN-10: 0738205141

ISBN-13: 9780738205144

Pub. Date: 01/08/2001

Publisher: Basic Books

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


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.

Product Details

Basic Books
Publication date:
Edition description:
New Edition
Product dimensions:
6.00(w) x 9.00(h) x (d)

Table of Contents

Chapter 1The Quest for the Right Portfolio Management Process1
What Is Portfolio Management?3
What Happens When You Lack Effective Portfolio Management4
A Roadmap of the Book6
Portfolio Management Is Vital7
Much Room for Improvement9
Major Challenges for Portfolio Management10
Some Definitions13
Chapter 2Three Decades of R&D Portfolio Methods: What Progress?15
Recent Advances in Portfolio Management Methods16
Where Portfolio Management Stands Today19
Major Gaps between Theory and Practice20
Portfolio Management: It's Not So Easy21
Requirements for Effective Portfolio Management23
What the Leaders Do: Three Goals in Portfolio Management26
Chapter 3Portfolio Management Methods: Maximizing the Value of the Portfolio29
Goal 1Maximizing the Value of the Portfolio29
Using Net Present Value to Get Bang for Buck29
Expected Commercial Value34
The Productivity Index (PI)40
Options Pricing Theory (OPT)42
Dynamic Rank-Ordered List43
The Dark Side of the Financial Approaches to Project Evaluation45
Valuation Methods: Scoring Models46
Developing and Using Scoring Models56
Assessment of Scoring Models68
Checklists As Portfolio Tools70
Paired Comparisons71
Value Maximization Methods: Summing Up71
Chapter 4Portfolio Management Methods: Seeking the Right Balance of Projects73
Goal 2Achieving a Balanced Portfolio73
Bubble Diagrams74
Variants of Risk-Reward Bubble Diagrams79
Other Bubble Diagrams92
Bubble Diagram Recap95
Other Charts for Portfolio Management95
Balance: Some Critical Comments103
Chapter 5Portfolio Management Methods: A Strong Link to Strategy105
Goal 3The Need to Build Strategy into the Portfolio105
Linking Strategy to the Portfolio: Approaches106
Developing a New Product Strategy for Your Business--A Quick Guide108
Moving to the Attack Plan119
Product and Technology Roadmaps121
Strategic Buckets: A Powerful Top-Down Approach123
Strengths and Weaknesses of Top-Down Approaches129
The Special Case of Platform Projects133
A Variant on Strategic Buckets: Target Spending Levels135
Bottom-Up Approach: Strategic Criteria Built into Project Selection Tools136
Top-Down, Bottom-Up Approach138
But How Much Should We Spend?142
Chapter 6Portfolio Management Methods Used and Performance Results Achieved145
The Average Business145
The Best and Worst Performers147
Satisfaction with Portfolio Management Methods148
The Nature of Portfolio Methods Employed150
Popularity and Use of the Various Portfolio Methods155
Which Methods the Best Performers Use158
Specific Project Selection Criteria Employed159
Selecting Projects in Rounds161
How Specific Portfolio Methods Perform162
The Benchmark Businesses166
Conclusions and Advice from Our Practices and Performance Study168
Chapter 7Challenges and Unresolved Issues173
General Conclusions173
Specific Conclusions and Challenges Identified in Effective Portfolio Management176
Challenges and Issues185
Portfolio Management Is Not the Complete Answer203
The Path Forward206
Chapter 8Data Integrity: Obtaining Reliable Information207
Types of Information Required208
Marketing, Revenue, and Pricing Data210
Manufacturing or Operations and Related Costs228
Estimating Probabilities of Success231
Estimating Resource Requirements236
Deal with Uncertainties: Sensitivity Analysis and Monte Carlo Simulation242
Chapter 9Making Strategic Allocations of Resources: Deployment247
In Search of the Right Portfolio Method247
Resource Allocation Across Business Units: The Methods248
Deciding the Spending Splits: The Strategic Buckets Model250
Strategic Buckets: A Step-by-Step Guide251
Some Features of the Strategic Buckets Decision Process265
Chapter 10Making Portfolio Management Work for You: Portfolio Management and Project Selection269
Three Key Components of the Portfolio Management Process269
Strategy: The First Key Driver of the Portfolio Management Process (PMP)270
Gating: The Second Key Driver of the Portfolio Management Process271
Portfolio Reviews: The Third Key Driver of the PMP273
Two Fundamentally Different Approaches to a Portfolio Management Process274
Approach 1The Gates Dominate--An Overview of How It Works275
Approach 2The Portfolio Review Dominates290
Pros and Cons of Approach 1 Versus Approach 2300
In Conclusion: An Integrated Decision System301
Chapter 11Designing and Implementing the Portfolio Management Process: Some Thoughts and Tips Before You Charge In303
Before You Charge In303
Stage 1Defining the Requirements304
Stage 2Designing the Portfolio Management Process--Key Action Items310
Stage 3Trial Installation and Adjustments321
Stage 4Implementation and Improvement325
Winning at New Products331
Appendix AOverhauling the New Product Process333
Appendix BSample Gate 3 Screening Criteria (Scored)341
Appendix CNewPort Max Software: A Tool for New Product Portfolio Management345
Appendix DThe NewProd 3000 Model347
Reference Notes349
About the Authors381

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Portfolio Management for New Products 2.5 out of 5 based on 0 ratings. 2 reviews.
Guest More than 1 year ago
The authors are undoubtedly among the experts in the subject matter. Some of the concepts and techniques are quite interesting and insightful. However, I sincerely believe the materials could be covered in one-third of the actual number of pages in the book. There are so much repetitions that it becomes almost annoying. Identical remarks are repeated again and again, as if there is not enough material to fill the pages of a full fledged book. Good books are not necessarily thick ones!!!
Anonymous More than 1 year ago