Portfolio Shaping Model Applicability

1 Portfolio Shaping Model Applicability

The text below has been reproduced from VARIES deliverable D3.5 (Van den Broeke, et al., 2015), section 3.3.1, and has been adapted for public dissemination.

This section gives an idea of how companies can approach the shaping of their product portfolio and how to plan their product roadmap.

1.1 Identifying product portfolio and analyse its evolution and selected product group

Before starting any product portfolio shaping, a company should first select the relevant product group they want to analyse.

A company should then analyse how the selected portfolio has changed in the past. For different years (and if possible on a more detailed level looking at different months) which products were part of the portfolio? This information can be found in the Bill of Material as being the different SKUs (Stock Keeping Units), or can be found as the changes in the marketing brochure or website where products are presented to the customers.

A green box indicates a product introduction and a red box indicates a product elimination. The example below gives an idea of how a product portfolio analysis can be visualised. A cell value of 1 denotes the existence of a certain product (represented by the rows) at a certain point in time (represented by the columns).

  Year 2010 Year 2011 Year 2012 Year 2013 Year 2014
Product 1 1 1
Product 2 1 1 1
Product 3 1 1 1
Product 4 1 1 1 1

In the example, product 1 is introduced in year 2013 and product 2 is no longer offered in year 2013. This could possibly indicate a product replacement or upgrade. Product 3 is introduced in year 2011 and eliminated in year 2014, so it has a lifespan of 3 years. Product 4 is introduced in 2010, removed in 2011 and re-introduced in year 2012, which indicates the possibility of re-introductions of products.

These are some of the scenarios that can be observed in a product portfolio analysis.

From the product portfolio evolution analysis, one can also see whether the company is confronted with a rapidly changing portfolio, whether the different products are highly differentiated or quite similar, and whether the products have a long lifetime or not.

1.2 identify variability drivers

A next step is to find out the reasons of these changes (i.e. what drives these changes). For example, product 2 might be replaced with product 1 because product 1 has a newer technology, which is required by the customers.

1.3 Analyse product portfolio and identify variation needs

Once the drivers (e.g., technological evolution) are identified, one can identify the product functionalities or features that are important. In the example below, the products are classified according to two features, which can have different values.

  Feature 1 Feature 2
Product 1 Value 2 Value 2
Product 2 Value 1 Value 2
Product 3 Value 3 Value 1

A company should be able to define and detect its major product features and construct the possible product variants by making all possible feature combinations. This gives a first impression of potential product variants for the future, however keep in mind that in the future, new features might arise which might lead to new potential product variants.

1.4 Identify expected key changes, variability drivers and variability decisions in the future

A next step for the company is to estimate how the environment (i.e. product requirements, technology evolution, …) might change in the future, and which drivers might as such become important. After assessing the expected changes in the future, and knowing how the company has responded to changes in the past, the company is ready to estimate which variability decisions might be needed at which point in time in the future (i.e. product road mapping).

1.5 Create scenarios for the future product portfolio and roadmap and select a scenario based on its impact and risk

There are different scenarios possible for the product portfolio and product roadmap.

To assess whether a product portfolio or product roadmap scenario would be interesting to actually execute, the company could assess the impact and risk of doing so. The company could therefore evaluate different aspects, such as the delivery time, the product quality, the flexibility, the risk, and most importantly the revenues (value to the customer) and costs.

1.6 Generic action model

The above description shows how future portfolio and roadmap may be shaped. As each company has its own practices we hereby present a more generic action model that can be used as a basis when companies define their processes:

Figure 1. Model for coordinating the planning of product portfolio and roadmap with different scenarios (source: D3.4)  (Hirvonen, et al., 2014)

Figure 1. Model for coordinating the planning of product portfolio and roadmap with different scenarios (source: D3.4) (Hirvonen, et al., 2014)

Within the VARIES project, each of steps were described with mode detail and examples and we recommend contacting CoIE partners for more details:


2 Bibliography

Hirvonen, H., Biot, O., Bollen, M., Van den Broeke, M., Vierimaa, M., Ervasti, M., . . . Kaunisto, J. (2014). VARIES Deliverable D3.4: Model to coordinate planning of product variants in different scenarios.

Van den Broeke, M., Vierimaa, M., Hirvonen, H., Bollen, M., Biot, O., & Teppola, S. (2015). VARIES Deliverable D3.5 Identifying and shaping variability in the product portfolio.