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New Product Development Professional Studies > Portfolio Management > Flashcards

Portfolio Management Flashcards

1
Q

Sr Mgmt needs to set goals for the firm’s development activities that will…

A
  • motivate action
  • guide decision making
  • indicate which behaviors will be rewarded
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2
Q

Financial models yield the best or worst economic value?

A

Worst

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3
Q

Benchmark businesses rely on what 3 Portfolio Methods?

A
  • Financial Method
  • Strategic Approach
  • Scoring Model
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4
Q

Benchmark Business PM Style

A
  • rated well across the board
  • most realistic
  • used by mgmt
  • highly effective
  • fits mgmt style

41.8%

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5
Q

Duds Business PM Style

A
  • wastes time
  • unrealistic
  • not used by mgmt

18.1%

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6
Q

Cowboy Business PM Style

A
  1. 1%
    - shoot from the hip
    - poor quality PM model
    - simplistic
    - mgmt likes approach
    - views processes as efficient
    - fits mgmt decision style
    - smallest cluster
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7
Q

Crossroad Business PM Style

A

28%

  • highly recommended, rated & realistic
  • mgmt doesn’t fully embrace
  • doesn’t fit mgmt style
  • not rated as efficient or effective
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8
Q

An estimated _____% of firms sales today come from products introduced within the last 5 years.

A

32%

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9
Q

What is the weakest facet of all product management activities?

A

Project Selection

Project Prioritization

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10
Q

Behavioral Approach to PM

A

Concensus decision

  • Delphi
  • Q-Sort
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11
Q

Analytical Hierachy Approach to PM

A

Decisions based on paired comparisons of both projects and criteria

Ex: Export Choice
a team of managers arrive at a set of projects

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12
Q

Strategic Approach to PM

A
  • driven by strategy of the business

- decides split of resources across different catagories to create strategic buckets

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13
Q

Options Priced Theory

A

Kodak

Treating each stage of the project similar to purchasing an option on a futures investment

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14
Q

Pobablistic Financial Model

A

Monte Carlo Simulation

Decision Trees

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15
Q

PM Financial Models & Financial Indices

A
  • NPV
    IRR (internal rate of return)
    Payback Methods
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16
Q

What is IRR?

A

Internal Rate of Return

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17
Q

What are the results for doing too many projects in a limited time?

A
  • longer cycle time
  • poor quality of execution
  • underperforming products
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18
Q

What yields the best porfolio?

A

Strategic Method + Scoring Approach

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19
Q

Who are the top performers in measuring Business Portfolio?

A

Benchmark Business

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20
Q

Bottom Up PM Approach

A
  • 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
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21
Q

Engineers should be assigned to no more than ___ projects

A

2

22
Q

What Stage is Portfolio Mgmt?

A

Stage 4 - Development

23
Q

New product & technology choices today determine what the company will look like ____ years out.

A

5

24
Q

What is Portfolio Mmgt about?

A

Resource allocation to achieve the business’s new product and technology objectives

25
Q

Keys to Portfolio Mgmt

A
  • Have a plan
  • Focus on strategy
  • Led by Sr Mgmt
  • Eliminate emotion from decisions
  • Properly assign resources
26
Q

Top-Down PM Approach (Strategic Buckets)

A
  • Vision and strategy developed
  • Mgmt decides where resources will be spent
  • Buckets with ideal spending defined
  • Project prioritized within buckets
  • spending reflects business strategy
27
Q

Most Dominate Porfolio Scoring Approach

A

Business Strategy Approach

28
Q

Most Popular Portfolio Scoring Approach

A

`Multiple Methods

  • Financial
  • Business Strategy
  • Bubble Diagrams
  • Scoring Models
29
Q

Why isn’t NPV a good financial criteria?

A
  1. It ignores probability and risk

2. Assumes financial forecasts are accurate

30
Q

Non-Financial Criteria for Scoring

A
  • Fit to Strategy
  • Market attractiveness
  • Reward vs risk
31
Q

Financial Criteria in Scoring

A
  • ROI
  • NPV
  • Break even point
32
Q

Goals of Portfolio Mgt

A
  • Maximize value of portfolio
  • Developing balanced projects / portfolio
  • Assuring projects are consistent with business strategy
33
Q

Senior Mgr’s role in PM

A
  • Direction setter
  • product line architect
  • Portfolio Mgr
  • Portfolio Process owner / creator
34
Q

Breakthrough Projects

A

New Platforms

New Technologies

35
Q

Platform Projects

A
  • new products
  • improvements
  • enhancements
  • dirivatives
  • supporting capabilties
36
Q

How PM and NPD Processes are related

A

products enter PM at Development stage

products can be killed in 2 places

  1. process gate
  2. Portfolio mgmt
37
Q

PM Characteristics

A
  • deals with future events
  • dynamic decisions
  • resource limited
  • projects are different stages of completion
  • resources often shared with other business functions
38
Q

Value of PM

A
  • collaborative decision by sr mgmt
  • consistent decision tools
  • link between strategy and execution
  • focus on new and existing products
  • decrease time to market
  • increase ROI
39
Q

Portfolio Framework

A 
Portfolio Planning
 - Criteria + Tools
Portfolio Assessment
 - Review each project and overall portfolio
Portfolio Review
 - quarterly
Resoruce Management
40
Q

Portfolio Mgmt Definition

A
  • Portfolio Assessment
  • Resource Mgmt
  • Portfolio Review
41
Q

Depiction of Portfolio

A

Maintenance - Big Winners

Dog - Long Shots

42
Q

Defintion of Portfolio

A

current funded and underway

  • R&D projects
  • technology
  • new product efforts

set of projects company is investing in and making strategic tradeoffs

43
Q

___% of companies said they have a well-defined portfolio process (2003)

A

56%

44
Q

Portfolio Mgmt Means..

A

Doing the right projects

45
Q

Development Funnel

A

collecting and screening ideas

46
Q

Development Funnels 4 Process Imperative

A
  • creative ideas need to be encouraged and nutured
  • creative ideas need to be tested and evaluated
  • creative ideas combined with other ideas to define effective projects
  • focused resources
  • shared commitments
47
Q

What issues need to be addressed to create the best product line architecture for the business?

A
  • Position
  • Type
  • Timing
  • Relationships
48
Q

What is the benefit of the APP (aggregate project plan)

A
  • manages project portfolio

- looks at the future as well as the present

49
Q

What 2 tasks are required in putting together the APP (aggregate project plan)

A
  1. Defining the project set

2. Matching projects to capabilities and capacity

50
Q

Portfolio Mgmt is about..

A

The Future
Limted Resources
Dynamic Environment

51
Q

When Allocating Resources, its important to know

A

How many resources you have

52
Q

3 Keys to Portfolio Mgmt are

A
  1. Strategy
  2. Resources
  3. Sr Mgmt

New Product Development Professional Studies (7 decks)

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