PPM - Products Portfolio Management

PPM (Products Portfolio Management) refers to the strategic process of managing a company's portfolio of products and services. The main goal of PPM is to evaluate the performance of each product, optimally allocate resources, and maximize the overall profitability of the company. PPM takes into account factors such as the product life cycle, market share, and growth rate.

Key Elements of PPM

1. Product Life Cycle Management

   • Evaluating each stage of the product life cycle (introduction, growth, maturity, decline) and developing appropriate strategies for each stage.

   • Example: Increasing marketing investment for products in the growth stage and implementing cost-cutting measures for products in the decline stage.

2. Market Share and Growth Rate Analysis

   • Analyzing the market share and market growth rate of products to clearly position each product.

   • Example: Products with high market share and high growth rate are positioned as "stars."

3. Optimal Resource Allocation

   • Allocating resources (funding, personnel, time, etc.) based on the performance of each product.

   • Example: Allocating more resources to products expected to grow and limiting resources for low-growth products.

4. Risk Management

   • Evaluating the overall risk of the product portfolio and developing strategies to diversify risks.

   • Example: Having a diverse product line to reduce overall risk if some products perform poorly.

PPM Tools and Frameworks

1. BCG Matrix (Boston Consulting Group Matrix)

   • A framework that classifies products into four categories: "stars," "cash cows," "question marks," and "dogs."

   • Example: Products with high market share and high growth rate are classified as "stars" and prioritized for investment.

2. GE Matrix (General Electric Matrix)

   • A framework that evaluates products based on market attractiveness and business strength to determine investment strategies.

   • Example: Investing actively in products with high market attractiveness and strong business strength.

3. Product Life Cycle Analysis

   • Analyzing which stage a product is in, from introduction to decline, and developing strategies appropriate for each stage.

   • Example: Strengthening marketing activities for products in the introduction stage to increase awareness.

Benefits of PPM

1. Strategic Decision-Making

   • Making strategic decisions based on product performance data.

   • Example: Concentrating investment in products expected to grow and withdrawing from low-growth products.

2. Efficient Resource Allocation

   • Allocating resources efficiently based on the stage and performance of each product.

   • Example: Concentrating limited marketing budgets on the most effective products.

3. Enhanced Risk Management

   • Understanding the overall risk of the product portfolio and developing strategies to diversify risks.

   • Example: Reducing risk in specific markets by expanding into new markets or segments.

PPM is a crucial strategic approach for companies to maintain competitiveness and achieve sustainable growth. By utilizing appropriate tools and frameworks, companies can optimize the performance of their product portfolio and contribute to overall success.