Interestingly enough, I have been asked this many times over in my career. Some may think the terminology refers to methods to derive the optimal combination of financial products that provide a better return than the S & P 500. Others believe that is a variation on the famous GE-McKinsey Portfolio Analysis Model. To a degree, its concept is based on both - it is driven by high-powered analytics similar to what you find in the financial sector, yet we overlay the strategic thought-leadership of management consultants - at a significant lower cost mind you!
So what is it in a nutshell? It is a consumer research study that identifies the key drivers of each product and brand in your Product Portfolio: What, When, Where, Who and Why?
It is a strategic blueprint that is consumer-driven with practical applications and reflects marketplace realities.
What Can It Do:
Go beyond traditional need states, segmentation research and perceptual mapping
Provide outputs that are highly actionable
Provide significant strategic and tactical value across entire portfolio
Identify incremental/ cannibalistic elements of the portfolio
Optimal management of your Product Portfolio to yield maximum revenue/ volume
Quantify the impact of Brand Synergy across the Portfolio - Measures "Halo" Effect
Product Portfolio Optimization provides the strategic and analytic platform to create well-defined brand/ sub-brand positioning that uses the following format:
Why is this critical? By creating clear and distinct positioning for each brand/ product, you ultimately can maximize the revenue and volume potential of the portfolio. It also serves as a springboard for Innovation, as it illuminates spaces that are not occupied in the marketplace.