Business portfolios optimization

Portfolio optimization is an analytical process used to determine the merits of adding, retaining, or deleting items from the product portfolio of a business. It can be summarized as a way to make sure that a company does not keep what they don t need. Portfolio optimization is important as aU SKUs become liabihties to an organization at some point in their lifecycles. The key is to estabhsh repeatable processes to identify when that point is reached and execute plans to capture as... 

In addition to the multi-criteria representation of the problem, relationships between projects, companies, and products should be taken into account. In such assessments, premium cost and maximal insured value can be found using Multi-Objective Decision-Making (MODM) methods and solving as a multi-criteria optimization problem (Figure 5.2) the same criteria can be reused for insurance portfolio optimization, and in the case of discrete alternatives (premium cost or insured value), the Multi-Attribute Decision-Making (MADM) approach can be used. Different risk assessment approaches can be adapted for MCDM for example, product lifecycle can be presented in detail and/or insured accidents can be presented implicitly along with business opportunities and other benefits. 

Against this background, what approach should a specialty company take to optimize its portfolio Should it pursue absolute scale Or should it focus management and capital on a narrower portfolio Should it consolidate and shape industry segments Should it spin off some businesses Or should it go for all of the above ... 

Following the approach described should result in an optimized risk-return ratio across the project portfolio. To ensure full business success, the resulting products must then be supported by all marketing levers. 

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