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“How do we optimize Strategic Portfolio Management and use it as a Competitive Weapon?”
Purpose
Strategic Portfolio Management has several compelling objectives
- Develop & Manage our Value Network (Web/Eco-System)
- Supply
- R&D
- Manufacturing
- Strategic Outsourcing
- Provide a Dynamic Picture of Strategic Evolution
- Value Migration
- Strategic Scenario Mapping
- Network Evolution
- Life Cycle Management
- Enable us to Lead our Market Spaces using alliances
- Maintain Competitive Advantages
- Establish New Market Beachheads
- Funnel Innovation from our Supply Chain
- Defend Critical Positions & Deprive Competitors of Best Partners
- Support Business Unit Alliances in our Market Space
- Coordination across/within Business Units
- Systems Optimization & Performance Monitoring
- Enhance Business Development & Alliance Governance
- Allocation of Resources
Symptoms of the Need
Companies Know they Need Portfolio Management When:
- Portfolio of Alliances Is Growing,
- But Things Are Starting to Get Out of Hand.
- Wide Variety of Alliances Are Starting to Conflict With Each Other
- Business Units Are Sometimes Constructing Alliances That Are Working at Cross Purposes.
- Strategic Value of Alliances Is Becoming More Important, but Their Performance Is Sporadic
- Management of Multiple Alliances Is Becoming a Head-ache
- Not Enough People Seem to Have the Skills and Capabilities to Make the Alliances Work Well.
- Network Is Expanding As Alliances Become an Extension of Your Company
- But There Does Not Seem to Be a Good Way to Share the Learning From Any of the Ventures Through Out the Organization.
Problems Can Be Great
When Companies Wait Too Long to Coordinate Their Portfolios:
- Business Unit Conflict
- Alliances Conflict in the Market Space
- Integrated Customer Solutions Not Designed or Delivered
- Critical Business Shifts are Missed & Competitors Out-Position Us
- Lost Opportunities
- – Missed Chances
- – Timing Off
- Poor Execution
- Second-Rate Partners
- Confusion
- Customers Not Supported
- Suppliers Misaligned
- Partner Conflict and Ambiguity
- Strategic Alliance Managers Unsure
- Value Chain Fragmentation or Degeneration
- Cycle Times Too Long
- Slow Delivery
- Poor Integration of Products, Services, Solutions, Technologies, etc.
Portfolio Management
Should have a Framework that is workable for users
- Process Framework must be:
- • Strategic & Targeted
- • Map Opportunities into Customer/Market-Focused Categories
- – Quickly drive high-level alignment
- – Linked to product and customer strategies
- – Caution regarding technology-focused or geographic-focused categories
- Structured Process
- • Disciplined
- – But also Simple & Easy to Understand & Use
- – Not over-engineered
- • Must Reflect Corporate & Business Unit Alliance Strategy
- – Allows Business Unit Exec. Sponsors to execute business development plans within pre-defined parameters
- – New Alliance Ventures must
- » support the Corporate and Business Unit strategies
- » Fit into the portfolio in a symbiotic manner
- • Agreed Upon & Used across all Business Units
- Standardized Tools for Category & Partner Analysis
- – Tools will Make Assessments Easier
- » Guidance on Decision Making for Opportunity Pursuit
- » Guidance on Alliance Transformation
- » Guidance on Competitive Strategy
Four Dynamics
should be Monitored to understand the Driving Forces in Market Space
- Value Migration in the Market Space
- Competitive Scenario Mapping
- Network Evolution & our Position in the Network relative to the Customer
- Life Cycle Management of each Alliance itself
NEXT STEPS
- WHAT DO WE DO TO GET STARTED?
- • Priorities
- • Leverage Points
- • Simple and Powerful Interventions
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