5 Key Considerations for Effective Product Portfolio Management

Product portfolio management is the process of managing a company’s portfolio of products. This is to ensure that they align with the company’s overall strategy and goals. It involves making decisions about which products to invest in, how to allocate resources among them, and how to phase out products that are no longer viable.

Key considerations for effective product portfolio management

Effective product portfolio management is critical for the success of any company. It helps to ensure that resources are being allocated in a way that will maximize value and drive business growth. Here are some key considerations for effective product portfolio management:

  1. Identify your target market. The first step in effective product portfolio management is to identify the target market for each product in the portfolio. This includes understanding the needs and preferences of the target audience, as well as any competitors in the market.
  2. Evaluate the potential value of each product. Once the target market has been identified, the next step is to evaluate the potential value of each product in the portfolio. This includes considering factors such as the size of the market, the potential for growth, and the level of competition.
  3. Allocate resources effectively. After identifying the potential value of each product, it’s important to allocate resources in a way that maximizes value and supports business growth. This may involve reallocating resources from lower-value products to higher-value products, or investing in the development of new products.
  4. Monitor and review the portfolio regularly. Product portfolio management is an ongoing process, and it’s important to regularly review and assess the portfolio to ensure that it aligns with the company’s overall strategy and goals. This may involve making changes to the portfolio, such as introducing new products or phasing out older ones.
  5. Communicate with stakeholders. Effective product portfolio management also involves effective communication with key stakeholders, including customers, sales and marketing teams, and other departments within the organization. By keeping these stakeholders informed about changes to the product portfolio, companies can ensure that they are aligned and working towards common goals.

Examples of effective product portfolio management

There are many companies that have implemented effective product portfolio management strategies. Here are a few examples:

  1. Procter & Gamble: P&G is known for its rigorous product portfolio management process, which involves regular assessment and evaluation of products to ensure they are aligned with the company’s overall strategy. The company uses a matrix system to analyze each product’s performance and potential, and then allocates resources accordingly.
  2. Apple: Apple is known for its focused product portfolio, which is centered around a few key products such as the iPhone, iPad, and MacBook. The company is very selective about the products it brings to market and invests heavily in research and development to ensure that each product is of the highest quality.
  3. Unilever: Unilever has a diverse portfolio of products, ranging from food and beverage to personal care and household goods. The company uses a “compass” approach to portfolio management, which involves balancing growth, profitability, and sustainability across its different categories and brands.
  4. General Electric: GE is known for its “boundaryless” approach to portfolio management, which involves constantly seeking new growth opportunities and divesting underperforming businesses. The company uses a rigorous assessment process to evaluate each business unit and determine its strategic fit within the overall portfolio.
  5. Amazon: Amazon’s product portfolio is constantly evolving as the company expands into new markets and industries. The company is known for its willingness to experiment with new products and services, and uses a data-driven approach to assess each new opportunity and determine its potential for success.


Product portfolio management is a crucial aspect of any company’s success. By following these steps, companies can ensure that they are maximizing the value of their product portfolio and driving business growth.

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