Portfolio planning

On Treacherous Ground, 50 of the world s biggest pharmaceutical companies are challenged to perform in the most difficult environment ever, Med. Ad News, September 1, 2002. Haspeslagh, P, Portfolio planning Uses and limits. Harvard Business Review, January-February, 1982, p. 58. 

Ibid., p. 518 on the BCG model of portfolio planning, see Nohria, Dyer, and Dalzell, Changing Fortunes, p. 65. 

Rogers M.J., Gupta A. and Maranas C.D. 2003. Risk Management in Real Options Based Pharmaceutical Portfolio Planning. POCAPO, 241—244. 

TurnbuU, P. W, (1990), A Review of Portfolio Planning Models for Industrial Marketing and Purchasing Management, European Journal of Marketing, Vol. 24, No. 3, pp. 7-22. 

This three-by-three matrix was developed by Royal Dutch Shell Group as a portfolio-planning tool. It integrates business sector prospects with a company s competitive capabilities (Figure 2.5). Positioning is determined in a similar manner to the competitive position-market attractiveness matrix. Though developed by Shell with specific reference to the petrochemical industry, the model is generally applicable in relation to all diversified enterprises. Shell uses four criteria to assess business sector prospects ... 

Effective mentors have a portfolio of models that they can draw upon to help mentees understand the issues they face. These models can be self-generated (i.e. the result of personal experience), drawn from elsewhere (e.g. models of company structure, interpersonal behaviours, strategic planning, career planning) or -... 

The rapid movement in the global phthalates market away from using plasticisers 2-ethylhexanol (2-EH) and diethylhexyl phthalate (DEHP) in favour of alternative products was underscored recently when BASF revealed plans to close its 2-EH and DEHP plants in Germany. The restructuring in Europe will have no effect on BASF s plasticiser portfolio in Nafta and Asia, however, where the company will continue to offer 2-EH and DEHP. About 70% of the plasticiser maiket volume is phthalates, and plasticisers make up about 60% of the plastic additives maiket. PVC accounts for 80-90% of global plasticiser consumption. In October 2003, California added DEHP to the state s list of more than 750 chemicals known to cause birth defects or reproductive harm. Previous studies had shown that the chemical can leach from plastic bags that contain intravenous fluids, blood, tube feedings or other medical treatment, and thereby enter the bodies of patients. 

These plans envision assembling a portfolio of in-licensed drug candidates for which collective development risk is deemed to be relatively low. The idea is to in-license molecules that either are too specialized (small market potential) for large pharma or are not visible to their radar because they come from places like Eastern Europe. These stories are favorites of professional investors, because rNPVs can be calculated with relatively low development risk on the basis of demonstrated clinical utility and/or pipeline diversity. Examples include Dura Pharmaceuticals, who marketed prescription products that treat infectious and respiratory diseases, and Gilead who marketed antiviral nucleotides discovered in the Czech Republic. 

The third investment. Scalable Systems (http //www.scalablesys. com/), came to Incubators Work via the incubator s internal business plan competition, which was started in 2000. The competition was open to any venture that had at least one person presently on the staff of an ST company, and the prize for the winner was guaranteed seed funding of S 500,000 from Incubators Work if the business was launched. The competition regularly attracted 15-20 entries per year, but Scalable Systems was the first entrant that ended up in the Incubators Work portfolio. Thia comments ... 

Planning an integrated petrochemical business portfolio for long-range financial stability. Industrial e[ Engineering Chemistry Research, 41, 2798. 

R D and technology plans can also be analyzed with widely used portfolio analysis (47), which provides visual correlations between variables such as potential value, probability of success, time-to-completion, technology maturity, and project cost as a means of optimizing the planned effort. The analyses can be used to redirect effort and reallocate resources as a project progresses. 

I Inflexible. Investment portfolios need to be updated. Those who adopt this plan often see their investments deteriorate. 

If you want to be sure something is left when you die, here s a plan that will work for you. Harvard University s endowment fund developed a spending guideline in 1973 to ensure a person wouldn t prematurely run out of money. The rule assumes a balanced portfolio allocated half to stocks and half to bonds and cash equivalents. It limits the first-year withdrawal to four percent of the portfolio s total value. Then, in each following year, increase this amount by the previous year s rate of inflation. Continue in this manner from year to year. For example, if you have a 500,000 portfolio, you could withdraw 20,000 in the first year. If the rate of inflation were 3.5 percent that year, you could withdraw 20,700 the second year. 

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