Title:Participatory Development of a Strategic Product Portfolio in a Telecommunication Company

Authors: Mats Lindstedt, Juuso Liesiö and Ahti Salo

Status: International Journal of Technology Management, Vol. 42, No. 3, pp. 250-266, 2008.

Date: April 24, 2008

Keywords: Decision analysis, Multi-criteria decision making, Portfolio management, Portfolio optimization, Preference programming.

The development of a product portfolio is a strategic decision which is often complicated by the large number of competing products, product interactions and high uncertainties about how successful the products will be in the marketplace. Often, these decisions are supported either by financially oriented approaches (e.g., net present value) or more qualitative approaches (e.g., scoring models) which, however, tend to suffer from shortcomings in capturing uncertainties and portfolio effects. Motivated by these, we report a real-life case study where a recently developed preference programming method - called Robust Portfolio Modelling (RPM) - was used to support the management group of a telecommunication company in the development of a strategic product portfolio in view of a 2-3 year time horizon. The positive experiences from this case study suggest that RPM may be useful even in other related decision settings where the presence of multiple objectives, uncertainties about product outcomes and possible variations in budgetary constraints must be accounted for.