Portfolio Management Flashcards
Sr Mgmt needs to set goals for the firm’s development activities that will…
- motivate action
- guide decision making
- indicate which behaviors will be rewarded
Financial models yield the best or worst economic value?
Worst
Benchmark businesses rely on what 3 Portfolio Methods?
- Financial Method
- Strategic Approach
- Scoring Model
Benchmark Business PM Style
- rated well across the board
- most realistic
- used by mgmt
- highly effective
- fits mgmt style
41.8%
Duds Business PM Style
- wastes time
- unrealistic
- not used by mgmt
18.1%
Cowboy Business PM Style
- 1%
- shoot from the hip
- poor quality PM model
- simplistic
- mgmt likes approach
- views processes as efficient
- fits mgmt decision style
- smallest cluster
Crossroad Business PM Style
28%
- highly recommended, rated & realistic
- mgmt doesn’t fully embrace
- doesn’t fit mgmt style
- not rated as efficient or effective
An estimated _____% of firms sales today come from products introduced within the last 5 years.
32%
What is the weakest facet of all product management activities?
Project Selection
Project Prioritization
Behavioral Approach to PM
Concensus decision
- Delphi
- Q-Sort
Analytical Hierachy Approach to PM
Decisions based on paired comparisons of both projects and criteria
Ex: Export Choice
a team of managers arrive at a set of projects
Strategic Approach to PM
- driven by strategy of the business
- decides split of resources across different catagories to create strategic buckets
Options Priced Theory
Kodak
Treating each stage of the project similar to purchasing an option on a futures investment
Pobablistic Financial Model
Monte Carlo Simulation
Decision Trees
PM Financial Models & Financial Indices
- NPV
IRR (internal rate of return)
Payback Methods
What is IRR?
Internal Rate of Return
What are the results for doing too many projects in a limited time?
- longer cycle time
- poor quality of execution
- underperforming products
What yields the best porfolio?
Strategic Method + Scoring Approach
Who are the top performers in measuring Business Portfolio?
Benchmark Business
Bottom Up PM Approach
- strategy criteria built into a selection criteria used to judge each project
- results in single portfolio
- assures all are on strategy
- doesn’t result in a desired % of spending to particular types of projects
Engineers should be assigned to no more than ___ projects
2
What Stage is Portfolio Mgmt?
Stage 4 - Development
New product & technology choices today determine what the company will look like ____ years out.
5
What is Portfolio Mmgt about?
Resource allocation to achieve the business’s new product and technology objectives
