Share This Article:

Product Portfolio Management—Governance for Commercial and Technical Portfolios over Life Cycle

Abstract Full-Text HTML XML Download Download as PDF (Size:3370KB) PP. 173-183
DOI: 10.4236/ti.2014.54016    6,922 Downloads   7,935 Views   Citations

ABSTRACT

Companies face an important question on whether they should allow product portfolio renewal to occur without interference by merely adding new products, or should the renewal be governed based on strategic and financial targets over life cycle? New product development phase is well covered in the product portfolio management (PPM) context, but later product life cycle phases are not covered well in this context. Neither are the different product structure levels adequately taken into account, instead the current PPM only discusses the “product” in general terms. Based on analysing the portfolio related practical challenges in ten case companies, and realising the deficiencies of current PPM theory motivated this explorative multiple case study. The principal results of this study involve revealing the need for a new potential PPM governance model that enables managing commercial and technical product portfolios over life cycle phases. A governance model framework, based on horizontal and vertical portfolios managed by two centralised teams, is proposed. Based on the data, and views of industrial experts, the created new PPM governance model has potential to aid business managers in understanding PPM as an entity that has a role in managing existing product portfolios and their renewal based on commercial and technical portfolios over life cycle as collaboration between business and engineering teams in all organisational levels.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

Tolonen, A. , Harkonen, J. and Haapasalo, H. (2014) Product Portfolio Management—Governance for Commercial and Technical Portfolios over Life Cycle. Technology and Investment, 5, 173-183. doi: 10.4236/ti.2014.54016.

References

[1] Cooper, R.G., Edgett, S.J. and Kleinschmidt, E.J. (2004) Benchmarking Best NPD Practices-II. Research Technology Management, 47, 50-59.
[2] Wan, X., Evers, P.T. and Dresner, M.E. (2012) Too Much of a Good Thing: The Impact of Product Variety on Operations and Sales Performance. Journal of Operations Management, 30, 316-324.
http://dx.doi.org/10.1016/j.jom.2011.12.002
[3] Hayes, R.H., Pisano, G.P., Upton, D.M. and Wheelwright, S.C. (2005) Operations, Strategy, and Technology: Pursuing the Competitive Edge. John Wiley & Sons, Inc., Hoboken, 369.
[4] Kang, W. and Montoya, M. (2014) The Impact of Product Portfolio Strategy on Financial Performance: The Roles of Product Development and Market Entry Decisions. Journal of Product Innovation Management, 31, 516-534.
http://dx.doi.org/10.1111/jpim.12111
[5] Droge, C., Vickery, S.K. and Jacobs, M.A. (2012) Does Supply Chain Integration Mediate the Relationships between Product/Process Strategy and Service Performance? An Empirical Study. International Journal of Production Economics, 137, 250-262.
http://dx.doi.org/10.1016/j.ijpe.2012.02.005
[6] Cooper, J. and Griffiths, J. (1994) Managing Variety in Automotive Logistics with the Rule of Three. International Journal of Logistics Management, 5, 29-40.
http://dx.doi.org/10.1108/09574099410805180
[7] Randall, T. and Ulrich, K. (2001) Product Variety, Supply Chain Structure, and Firm Performance: Analysis of the US Bicycle Industry. Management Science, 47, 1588-1604.
http://dx.doi.org/10.1287/mnsc.47.12.1588.10237
[8] Thonemann, U.W. and Bradley, J.R. (2002) The Effect of Product Variety on Supply-Chain Performance. European Journal of Operational Research, 143, 548-569.
http://dx.doi.org/10.1016/S0377-2217(01)00343-5
[9] Langenberg, K.U., Seifert, R.W. and Tancrez, J.-S. (2012) Aligning Supply Chain Portfolios with Product Portfolios. International Journal of Production Economics, 135, 500-513.
http://dx.doi.org/10.1016/j.ijpe.2011.08.032
[10] Orfi, N., Terpenny, J. and Asli, S.S. (2011) Harnessing Product Complexity: Step 1—Establishing Product Complexity Dimensions and Indicators. The Engineering Economist, 56, 59-79.
http://dx.doi.org/10.1080/0013791X.2010.549935
[11] Gunasekaran, A., Patel, C. and McGaughey, R.E. (2004) A Framework for Supply Chain Performance Measurement. International Journal of Production Economics, 87, 333-347.
http://dx.doi.org/10.1016/j.ijpe.2003.08.003
[12] Den Hartog, E.-J. (2012) Reducing Complexity at Procter & Gamble: A Complexity Approach towards Product Portfolio Management. Master Thesis, University of Twente, Enschede.
[13] Lynn, G.S., Abel, K.D., Valentine, W.S. and Wright, R.C. (1999) Key Factors in Increasing Speed to Market and Improving New Products Success Rates. Industrial Marketing Management, 28, 319-326.
http://dx.doi.org/10.1016/S0019-8501(98)00008-X
[14] O’Reilly III, C.A. and Tushman, M.L. (2004) The Ambidextrous Organization. Harvard Business Review, 82, 74-81.
[15] Sosa, E.S., Eppinger, S.D. and Rowles, C.M. (2004) The Misalignment of Product Architecture and Organizational Structure in Complex Product Development. Management Science, 50, 1674-1689.
http://dx.doi.org/10.1287/mnsc.1040.0289
[16] Ward, J. and Peppard, J. (2002) Strategic Planning for Information Systems. 3rd Edition, John Wiley & Sons Ltd., Chichester, 624 p.
[17] Cooper, R. (2008) Perspective: The Stage-Gate?, Idea-to-Launch Process—Update, What’s New, and NexGen Systems. Journal of Product Innovation Management, 25, 213-232.
http://dx.doi.org/10.1111/j.1540-5885.2008.00296.x
[18] Leffingwell, D. (2007) Scaling Software Agility: Best Practices for Large Enterprises. Addison-Wesley, Boston.
[19] Cooper, R.G., Edgett, S.J. and Kleinschmidt, E.J. (1997) Portfolio Management in New Product Development: Lessons from the Leaders-I. Research Technology Management, 40, 16-28.
[20] V?h?niitty, J. (2006) Do Small Software Companies Need Portfolio Management? Licentiate Thesis, Helsinki University of Technology, Espoo.
[21] Van de Weerd, I., Brinkkemper, S., Nieuwenhuis, R., Versendaal, J. and Bijlsma, L. (2006) Towards a Reference Framework for Software Product. 14th IEEE International Conference on Requirement Engineering, Minneapolis/St. Paul, 11-15 September 2006, 319-322.
http://dx.doi.org/10.1109/RE.2006.66
[22] Haapasalo, H., Ingalsuo, K. and Lenkkeri, T. (2006) Linking Strategy into Operational Management—A Survey of BSC Implementation in Finnish Energy Sector. Benchmarking: An International Journal, 13, 701-717.
[23] Cooper, R.G., Edgett, S.J. and Kleinschmidt, E.J. (1999) New Product Portfolio Management: Practices and Performance. Journal of Product Innovation Management, 16, 333-351.
http://dx.doi.org/10.1016/S0737-6782(99)00005-3
[24] Kropsu-Vehkapera, H. and Haapasalo, H. (2011) Defining Product Data Views for Different Stakeholders. Journal of Computer Information Systems, 52, 61-72.
[25] Sk?ld, M. and Karlsson, C. (2013) Stratifying the Development of Product Platforms: Requirements for Resources, Organization, and Management Styles. Journal of Product Innovation Management, 30, 62-76.
http://dx.doi.org/10.1111/jpim.12064
[26] Barczak, G., Griffin, A. and Kahn, B. (2009) PERSPECTIVE: Trends and Drivers of Success in NPD, Practices: Results of the 2003 PDMA Best Practices Study. Product Innovation Management, 26, 3-23.
http://dx.doi.org/10.1111/j.1540-5885.2009.00331.x
[27] Cooper, R.G., Edgett, S.J. and Kleinschmidt, E.J. (2001) Portfolio Management for New Product Development: Results of an Industry Practices Study. R&D Management, 31, 361-380.
http://dx.doi.org/10.1111/1467-9310.00225
[28] Schultz, C., Salomo, S. and Talke, K. (2013) Measuring New Product Innovativeness: How Differences in Scale Width and Evaluator Perspectives Affects Its Relationship with Performance. Journal of Product Innovation Management, 30, 93-109.
http://dx.doi.org/10.1111/jpim.12073
[29] Hanninen, K., Muhos, M., Kinnunen, T. and Haapasalo, H. (2014) Business Reasoning for Rapid Productization in Small Enterprises. Technology and Investment, 5, 56-64.
http://dx.doi.org/10.4236/ti.2014.51007
[30] Majava, J., Nuottila, J., Haapasalo, H. and Law, K. (2014) Customer Needs in Market-Driven Product Development: Product Management and R&D Standpoints. Technology and Investment, 5, 16-25.
http://dx.doi.org/10.4236/ti.2014.51003
[31] Kester, L., Griffing, A., Hultink, E.J. and Lauche, K. (2011) Exploring Portfolio Decision-Making Processes. Journal of Product Innovation Management, 28, 641-661.
[32] McNally, R.C., Durmusoglu, S.S. and Calantone, R.J. (2012) New Product Portfolio Management Decisions: Antecedents and Consequences. Journal of Product Innovation Management, 30, 245-261.
http://dx.doi.org/10.1111/j.1540-5885.2012.00997.x
[33] Saaksvuori, A. and Immonen, A. (2008) Product Lifecycle Management. Springer-Verlag, Berlin Heidelberg, 253 p.
http://dx.doi.org/10.1007/978-3-540-78172-1

  
comments powered by Disqus

Copyright © 2019 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.