Thanks everyone who participated in this webcast from The Association of International Product Marketing and Management (AIPMM). I welcome your comments regarding this topic. Contact me here: http:/linkd.in/hdelcastillo. Description Most companies struggle to find the right balance between growing existing products, creating new products that get traction, and managing risk. In my experience, companies that have an innovation growth strategy often struggle to implement a process that allows the integration of strategic analysis to help them make smarter decisions about their product portfolio. These companies risk building the wrong products or adopt the wrong product strategy for products within their portfolio. This session will discuss why product portfolio analysis is essential for the success of companies wanting to grow or expand. It will also identify tools to guide critical product decisions and manage challenges. Join Hector Del Castillo as he shares insights on how to make smarter decisions about your products. Key takeaways from participating in this webinar: - How to evaluate your product portfolio - How to define success metrics to assess market performance - How to assess risk of your product portfolio - How to balance growth and risk Who Should Attend This discussion is for CXOs, VPs and Directors of Product Management and Product Marketing, experienced product managers, and product team leaders who perform product portfolio analysis to improve the market performance of products About the Speaker: Hector Del Castillo, a product innovation strategy consultant, has over 15 years of experience directing the product strategy for companies to create new revenue streams and reduce risk by growing high-performing product teams and implementing a product life cycle management process. He has launched several profitable technology-based products and solutions. He provides services as a consultant, contractor, coach, or trainer to companies that want to grow and create value-added products that delight customers and create demand. About AIPMM The AIPMM is the hub of all things product management. It is where product professionals go for answers. With members in over 65 countries, it is the worldwide certifying body of product team professionals. It is the world's largest professional organization of product managers, brand managers, product marketing managers and other product team professionals who are responsible for guiding their organizations, or clients, through a constantly changing business landscape. Visit www.aipmm.com.

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AIPMM Webinar Series
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Founded 1998
World’s largest professional association for product
management, product marketing and brand management
Provides professional development and certification
• Certified Product Manager
• Certified Product Marketing Manager
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AIPMM Certifications
AIPMM offers globally recognized certifications:
• Certified Product Manager (CPM®)
• Certified Product Marketing Manager (CPMM®)
• Agile Certified Product Manager (ACPM®)
• Certified Innovation Leader (CIL®)
• Certified Brand Manager (CBM®)

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• 12-month AIPMM premium membership
($175 value)
Participate and Win!

6. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Hector: @hmdelcastillo
Therese: @theresepadilla
AIPMM: @AIPMM
Tweet!

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Today’s Speaker
Moderator:
Therese Padilla, AIPMM President
Presenter:
Hector Del Castillo, CPM, CPMM
Senior Product Innovation Consultant
hmdelcastillo@aipmm.com
linkd.in/hdelcastillo

8. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
FEATURED PRESENTATION

9. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Hector Del Castillo
linkd.in/hdelcastillo

10. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
I want to thank everyone who attended this
webcast.
I welcome your feedback regarding this topic.
Contact me with any comments or questions.
I look forward to seeing you again soon.

11. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
What We Will Discuss
1. Why perform product portfolio analysis
2. Product portfolio analysis tools
3. Managing a product portfolio
4. Turning insights into action
5. Key Takeaways

12. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
How do you measure the
market performance for your
products?

13. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
What is the difference between
Product Portfolio Analysis and
Product Planning?

14. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Comparison
Product Portfolio
Analysis
1. the process of
evaluating the range
of products a
business offers in an
attempt to improve
market performance
of the entire product
portfolio.
Product Planning
1. the process of
defining the right
products to introduce
to market in an
attempt to create
new revenue streams
for a business.
Strategic Tactical
Source: © 2012 Research Study, AIPMM, All Rights Reserved.

15. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
1. Select the proper portfolio
analysis tool.

16. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Stars
Question
Marks
Cash
Cows
Dogs
BCG Matrix
Relative Market Share
MarketGrowthRate
Source: “BCG Matrix,” Boston Consulting Group

17. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
BCG Matrix: Cash Cows
Source: “BCG Matrix,” Boston Consulting Group
• Have high market
share and low market
growth
• Market share must be
protected
• Use defensive
marketing tactics
• Can be very profitable
• Difficult to achieve
higher market share
Cash
Cows

18. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
BCG Matrix: Stars
Source: “BCG Matrix,” Boston Consulting Group
• Have high market share and
high market growth
• Must work much harder to
retain high market share
• Can attract competitors quickly
• Competitors can gain market
share by attracting the new
customers who are entering
the market
• Require offensive marketing
tactics to retain their status
• May become cash cows once
the market matures
Stars

19. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
BCG Matrix: Question Marks
Source: “BCG Matrix,” Boston Consulting Group
• Have low market share and
high market growth
• Require investment to
become stars or cash cows
• High market growth can
attract new customers that
have not bought from rivals
• Require significant
marketing effort and may
not succeed
• Selectively choose which
“question marks” to develop
Question
Marks

20. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
BCG Matrix: Dogs
Source: “BCG Matrix,” Boston Consulting Group
• Have low market share
and low market growth
• Need to be
harvested, divested or
retired
• Gaining greater market
share is unlikely as the
market itself is not
growing
• Selectively choose which
“dogs” to harvest
Dogs

21. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
How To Use The BCG Matrix
1. Plot your products according to their market
share and market growth.
2. If a product seems to fall right on one of the
lines, rely on past performance to help decide
which category applies.
3. Determine which of four strategies applies to
each product/product line.

22. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Stars
Question
Marks
Cash
Cows
Dogs
BCG Matrix: Strategies
Relative Market Share
MarketGrowthRate
Source: “BCG Matrix,” Boston Consulting Group
Build

23. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Stars
Question
Marks
Cash
Cows
Dogs
BCG Matrix: Strategies
Relative Market Share
MarketGrowthRate
Source: “BCG Matrix,” Boston Consulting Group
Hold

24. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Stars
Question
Marks
Cash
Cows
Dogs
BCG Matrix: Strategies
Relative Market Share
MarketGrowthRate
Source: “BCG Matrix,” Boston Consulting Group
Divest/
Harvest

25. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Stars
Question
Marks
Cash
Cows
Dogs
BCG Matrix: Strategies
Relative Market Share
MarketGrowthRate
Source: “BCG Matrix,” Boston Consulting Group
Build/
Harvest

26. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Invest/
Grow
Build
Selectively
Generate
Cash
Build
Selectively
Selectivity/
Earnings
Harvest
Find Niche/
Retire
Harvest
Divest/
Retire
GE/ McKinsey 9-Box Matrix
Industry Attractiveness
BusinessPosition
Source: “Enduring Ideas: The GE–McKinsey nine-box matrix,” McKinsey Quarterly

27. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Industry Attractiveness Indicators
• Market Factors
̶ Size
̶ Growth Rate
̶ Cyclicality
̶ Seasonality
• Competition
̶ Type of competitors
̶ Degree of Concentration

28. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Industry Attractiveness Indicators
• Financial & Economic
̶ Contribution Margins
̶ Barriers to Entry or Exit
• Technological
̶ Patents & copyrights
̶ Will it become obsolete
• Sociopolitical
̶ Social attitudes & trends
̶ Laws & government regulations

29. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Business Position Indicators
• Market
̶ Company’s Market Share
̶ Company’s Sales or Share Growth Rate
• Competition
̶ Strength of
product, promotion, price, distribution, financial
resources, management relative to competition
• Financial & Economic
̶ Company’s Margins
̶ Economies of scale

30. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Business Position Indicators
• Technological
̶ Company’s ability to cope with change
̶ Technological skills
̶ Patent Protection
• Sociopolitical
̶ Company’s responsiveness & flexibility

31. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
How To Use The GE Matrix
1. Select key performance indicators.
2. Assign each indicator a weight (total = 1)
based on its importance.
3. Rate each indicator on industry attractiveness
and each indicator for business position on a
scale of 1(weak) – 5 (strong).
4. Multiply weight times rating for each
indicator and add total for each axis.

32. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
GE McKinsey Matrix Example
Weight Rating (1-5) Value
Business Position
Market share .25 3 .75
Product Strength .25 4 1
Competitive Strength .25 3 .75
Financial Strength .25 5 1.25
Industry Attractiveness
Market Strength .25 5 1.25
Technology Strength .25 5 1.25
Level of Competition .25 3 .75
Financial Strength .25 4 1

33. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
2. Select the right key
performance indicators

34. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
KPIs measure an organization’s
performance and assist in
developing performance goals
and strategies

35. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
What are key performance
indicators for your products?

36. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
KPI Characteristics
• Accepted by the organization
• Tied directly to a strategic objective
• Rated or graded
• Time sensitive

37. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
KPI Development Process
Identify the
results you
expect.
Establish the
numbers the
company
needs to
reach its
goals.
Measure the
progress that
has occurred
so far.
Determine
the
percentage
of change
that has
occurred
within each
area of
review.
Establish the
frequency of
reviewing
these
indicators.
Step 1 Step 2 Step 3 Step 4 Step 5

38. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Market Customer
Business Organization
Product
Source: © 1998-2103 AIPMM ProdBOK, All Rights Reserved.

39. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Market
• Market Insight
• Market Segmentation
• Competitive Analysis
• Industry Profitability
• Segment Profitability

40. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Customer
• Customer Strategy
• Customer Relationships
• Customer Acquisition
• Customer Profitability
• Brand Awareness & Loyalty
• Buy Behavior

41. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Organization
• Employee Development
• Employee Satisfaction
• Management Responsibility
• Manufacturing & Operations

42. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Business
• Business Strategy
• Quality, Process Improvement & Change
Management
• Technology Management
• Financial Analysis, Reporting, & Capital
Management
• Accounting Management

43. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Product
• Product Development & Support
• Product Profitability
• Augmented Product
• Distribution Channels
• Price
• Promotion
• Customer Support

44. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
3. Agree on success criteria

45. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Marketing
• Marketing Program Effectiveness
• Price Adjustments and Price Elasticity
• Product Profitability
• Customer Profitability
• Distribution Channel Profitability
• Channel Evaluation and Selection
• Brand Awareness & Loyalty

46. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Sales
• Average Sales Cycle
• Average Revenue Per Customer
• Number of Demos
• Sales Funnel Metrics
• Number of New Customers
• Customer Retention Rate
• Gross Margin Metrics

47. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Customer Support
• Customer Satisfaction
• Number of Unresolved Customer Issues
• Average Time To Resolve Support Issues
• Customer Service Requests
• Customer Support Profitability

48. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Product Support
• Product Profitability
• Product Sales Performance
• Price Assessment
• Conjoint Analysis
• Tradeoff Analysis
• Portfolio Resource Allocation
• Attribute Preference Testing

49. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Business Strategy
• Strategic Scenarios
• Industry Attractiveness
• Business Strength
• Market Growth Rate
• Market Share
• Balanced Scorecard

50. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Business Operations
• Forecasting
• Predictive Analytics
• Data Mining
• Critical Success Factors

51. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
4. Perform product portfolio
analysis on a regular basis

52. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Types of Metrics
Type of Metric Answers This Question
Strategic Track critical assets that must be
tended to over a relatively long
time
Which products must we
protect?
Operational Track product quality, on-time
delivery, and augmented services
What are our strengths?
Problem-Oriented Address critical challenges facing
the business, such as problems
collecting receivables or
controlling costs in specific areas.
How do we mitigate
weaknesses?
Technical Evaluate the behavior of
technologies and of technology-
dependent business processes
Which technologies
should we adopt to
strengthen the portfolio?
Financial Track profitability, ROI and cash
flow for the business
Which products are most
profitable? Why?

53. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Chart Types
Type Examples Purpose
Bar
often used for a
single point in
time
Bubble
Pie
Scatter

54. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Chart Types
Type Examples Purpose
Area
Often used for
time series
Column
Line

55. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Chart Types
Type Examples Purpose
Stock
Often used for
price changes
Surface Often used for
conjoint analysisRadar

56. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
5. Measure results and take
corrective actions

57. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
You may not own the critical
decisions, but you can certainly
influence the decision makers.

58. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Ensure accurate information is
available to guide critical
decisions based on facts about
market and customer insights.

59. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Key Takeaways
• Use the proper product portfolio analysis tool1
• Select the right key performance indicators2
• Agree on success criteria3
• Perform portfolio analysis on a regular basis4
• Measure results and take corrective actions5

60. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Q&A
Moderator:
Therese Padilla, AIPMM President
Presenter:
Hector Del Castillo, CPM, CPMM
Senior Product Innovation Consultant
hmdelcastillo@aipmm.com
linkd.in/hdelcastillo

61. © AIPMM 2013 www.aipmm.com @AIPMM
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For More Information About
• AIPMM membership benefits
• Certification courses near you
• How to prepare to take a certification exam
• Strengthening your product portfolio to delight
your customers, increase value and minimize
risk
Hector Del Castillo, PMP, CPM, CPMM
Transforming products to wealth for technology-based organizations.TM
Product Marketing Director
hmdelcastillo [at] aipmm.com

64. © AIPMM 2013 www.aipmm.com @AIPMM
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65. © H. Del Castillo, AIPMM 2013 Linkd.in/hdelcastillo
Hector Del Castillo
• Senior consultant with over 15 years of experience transforming
products to wealth for technology-based companies
• AIPMM Body of Knowledge (ProdBOK®) Contributor
• Established companies
– Jet Propulsion Laboratory, Lucent Technologies, MEI Technologies
• Small companies and startups
– Nextone Communications, Smith Micro Software
• Launched 30+ Products for global deployment
– HW/SW, Telecom, Enterprise Mobility, Information Security
Services, Professional Development
• Certified PMP®, CPM® and CPMM®
• University of California at Santa Barbara, MS EE
• University of Texas at El Paso, MS EE, BS EE
67

66. © AIPMM 2013 www.aipmm.com @AIPMM
Hector Del Castillo
CPM, CPMM, PMP
linkd.in/hdelcastillo
@hmdelcastillo
hmdelcastillo@aipmm.com