Value Innovation Portfolio Management

A Better Approach to Your Portfolio
Are you 100 percent satisfied with the performance of your product portfolio? Do shareholders wish you could do better? Can you tie the products you are selecting directly to expressed or hidden customer needs? Once you create products, are they always successful? If you secretly -- or not so secretly -- wonder whether there might not be a better way to select products for inclusion in your product portfolio, then maybe it's time for you to become a VIP.

What is Value Innovation Portfolio (VIP) Management?
Value Innovation Portfolio Management is a new way of selecting products for a portfolio -- whether at the level of the individual business unit or across divisions. Instead of relying on guesswork, unpredictable financial data, hunches, or the charisma of the product manager, the VIP approach to product portfolio management relies on analysis of customer value. While customer value may seem unquantifiable, PDC has developed reliable ways to evaluate it and then use it to determine which products to include in the product mix. Companies using this approach can answer tough questions such as: What products do I launch?

  • In which products do I invest (and which do I divest)?
  • How do I delight customers?
  • How do I avoid costly product failures?
What does VIP Management offer?
Using the VIP approach, you can
  • Understand what gets in the way of your customer’s greater success
  • Balance your company's core competencies with market needs
  • Position your organization to stay ahead of competitors by unearthing value-based requirements
  • Re-think planning along value dimensions
  • Use customers and markets to set the value of innovation
  • Organize your portfolio and innovation processes to account for the central role of customer value
  • Institutionalize this new approach to portfolio management
VIP Management Benefits
Using the VIP approach will help you
  • Increase your percentage of successful development projects
  • Evaluate customer value based on tangible criteria
  • Reduce investments in dead-end projects
  • Establish the foundation for a sustainable and profitable product pipeline

Can your company benefit from VIP Management? Contact PDC to find out.
What Really Matters in Portfolio Decisions?

No matter how many ethnographic studies you commission or how many focus groups you conduct, you won't consistently create winning products until you stop making portfolio decisions based on financial projections and start making them based on what customers value.


WISE WORDS
"As a general manager, you’re always dealing with the allocation of scarce resources. The more complete an understanding you have of your customer, the more likely you are to allocate your resources to working on problems that are most important to them, which translate into larger revenue opportunities for the company."


See how these companies are implementing VIP Management.

Teradyne

Read more about PDC's book Value Innovation Portfolio Management.