Portfolio objectives

An evaluation of the company s functional capability to execute its plans will be the basis for deciding if an objective is currently achievable and realistic. If this is not the case changes to the organization will be required in order to meet the objective. The relationship between the internal landscape of strengths and weaknesses and the chosen objective will thus be one of the key considerations in setting the objective. When a company is small or has a limited geographic scope it will not have the resources to undertake a multinational product launch 

The other side of the situation analysis though is the real world. Here, competitors will be moving independently of the company s internal concerns and it is by looking at the activities of these competitors and at the market itself that opportunities will be revealed. The results of the company s performance must generate improvements in turnover or profit for its shareholders, but to remain attractive as a continuing investment these improvements will also need to be reflected in comparable or better growth than national or international competitors. 

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The choice of the appropriate azeotropic distillation method and the resulting flowsheet for the separation of a particular mixture are strong functions of the separation objective. For example, it may be desirable to recover all constituents of the original feed mixture as pure components, or only some as pure components and some as azeotropic mixtures suitable for recycle. Not every objective may be obtainable by azeotropic distillation for a given mixture and portfolio of candidate entrainers. 

The objects can also be detailed or abstracted. A seminar company has a Sales department and an Operations department a Seminar System, which helps coordinate activities and a portfolio of courses, each of which deals with a number of Subjects (see Figure 1.9). As before, boxes are the default representation of object types. We can use stick figures... 

How is a specific objective within the R D portfolio, e.g. the search for anxiolytic drugs with a fast onset of action (like benzodiazepines) but lacking cognitive side effects and addictive potential (unlike benzodiazepines), to be partitioned and sequenced so that individual groups within R D, with their different approaches and methods, can be integrated sensibly into the project ... 

The need to evaluate production sites can arise in different situations. Most obviously, a network optimization project resulting in the decision to establish new production capacity may require a site selection phase in one or more countries (cf. Chap. 2.4.4). Depending on the status quo, the task either is to identify and evaluate potential production sites or to choose the most suitable one from a set of existing sites. Conversely, if capacity is to be reduced potential closure candidates might have to be assessed to identify the one least suitable for future use. Additionally, as pointed out in Chapter 2.4.5, a regular evaluation of all production sites is also required in the context of site controlling. Here the objective is to rank a company s entire portfolio of existing sites to identify action needs. 

D. Increasing strategic distinctiveness D-1. Corporate refocusing D-2. Buy and build strategies Adjusting the strategic objectives, programs and processes of the portfolio company... 

The strategy phase focused on integrating the patent portfolio with business objectives in order to maximise its value. It also identified gaps in the portfolio that needed to be addressed. This phase is connected to the valuation and competitive assessment phases. 

In the final investment phase a judgment is made on whether to put more money in R D, enter a joint venture or license a technology from outside in order to meet business objectives, basing the decision on a prior assessment of the company s knowledge gaps. If the company successfully obtains a needed technology or secures an appropriate patent, the intellectual asset is incorporated into the portfolio and the process repeats itself. 

The design of the project portfolio (and also the allocation of resources) is based on the objectives that are determined by the management team. We have found it useful to rank each project - typical major ones include projects to develop the vision, to realize the full potential to add value, and to insure the effective operation of the new businesses, in line with the three key aspects described... 

Senior management should define the new product project portfolio and the aggregate set of projects that will achieve their strategic objectives. 

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