Chapter 5 what level of investments a particular product

might need and what would be the returns from

Understanding Product Porfolios such a product. As the other goal of product
portfolio management is cash flow management,
Members the BCG matrix propagates balancing the cash
flow between all products equally. In harsh
words – no extra revenue should be given to
Concept of the Product Portfolio products which cant give the revenue back to the
organization.
The desirability of a portfolio or range
of different products is implicit in the concept of
the product life cycle which emphasizesa that,
ultimately, all products and the technologies
which underlie them will change.
And so it is with the most other products
and technologies. Indeed, as we have seen in
earlier chapters, given that both generic
strategies of cost leadership and differentiation
depend on innovation, new product and process
and development have become the basis for
competitiveness activity in all kinds of markets.
A product portfolio is comprised of all
the products which an organization has. A
product portfolio may comprise of different
categories of products, different product lines
and finally the individual product itself.
Management is needed on all the three levels of
a product portfolio. You need managers for
managing individual products, managing
product lines and finally the top level
management which manages the complete
portfolio.
How do we classify the products in a product
portfolio?
Product classification is done on the
basis of the BCG matrix. The BCG matrix
classifies products on the basis of the market
share of the product as well as the growth rate
which a product may have. On the basis of this
classification, a product manager can decide