When asked about portfolio strategy, it is customary to reply with financial models with cash cows and stars (etc.). Indeed, when dealing with long product ranges - where roles and differences between variants are not always clear - the financial simplification is tempting. Yet, it is hard to get the company and distributors enthused.
So how do you make sure your Portfolio Strategy is strong, that it matches existing and future opportunities and leverages company know- how? A proper Portfolio Strategy process should help answer these questions:
1 - Where are the reachable value pools in your market? Think in and out your immediate category, especially if your audience has mixed consumption patterns (drinks, food…). Redefine your market space beyond your category.
2 - Who is competing for this value, how, and at what price points? This is a key step to start painting a picture of an opportunity attractiveness AND the attainability of a market. This in turn allows to draw priorities.
3 - What are the consumers’ motivations in your segments of interest? Get away from stereotypes, such as “how to rejuvenate our public because our consumers are getting old” or classic "value for money" mind-locks.
4 - What are the underlying trends that matter? Collect and review the trends where you are certain are taking place and where you can answer the question “so what’s in it for us?”.
5 - Does your current Portfolio meet these opportunities? And so, what is the current Strategy to get there? This is where decisions on line extensions, repositioning or innovations are made. Explore all options, be creative.
6 - What are the implications and the required resources? Get under the hood, look at budgets, people, initiatives, P&L’s. This will help make a case for more resources against a goal. If innovations are centrally created, it helps markets define what the innovation solution should address.
7 - How is the Portfolio orchestrated and what are the brand roles? It is now possible to build the Portfolio orchestration, with roles expressed with a consumer goals (recruit, premiumize…) and financial approach (invest, harvest…).
If you have a process and the skills in place supported by strong intellectual proprietary method to build a superb portfolio (which is the envy of your competitors), you are in a fine place. But if you feel the everyday pressure leave no time for quality thinking or your current team capabilities are a bit light on this area, then look for facilitators who can help you answer the right questions and formulate a way forward in a compelling and commercially sound fashion.