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Portfolio Management for New Products, 2nd Edition

Robert G. Cooper, Scott J. Edgett, and Elko J. Kleinschmidt

Hard Cover | 345 pages
Published by Perseus Publishing, 2001
Price: $44.00 US


How Does Your Company Invest Its R&D and Product Innovation Resources?

This book empowers you to look at "the big picture" and question whether you are meeting your new product goals. It is an essential resource for any company whose profitability, and very existence, relies on the products it develops and the speed with which it brings those products to market. Portfolio Management for New Products presents a rigorous and practical approach to managing a company’s product portfolio.

Maximize Value, Achieve Balance and Support Business Strategy

Product Innovators win in the long run by optimizing their R&D investments with a new product strategy, selecting the right new product projects and achieving an ideal balance of projects. Portfolio Management for New Products helps you understand how winning companies manage their R&D portfolios. Learn how to steer your company’s R&D investment to achieve a higher return.

This ground breaking book is the result of years of pioneering research by Dr. Cooper, Dr. Edgett and Dr. Kleinschmidt. It is full of practical examples from real companies combined with the authors’ analysis of the various approaches. It illustrates the subtle but important differences between the traditional methods of portfolio management for investments and projects versus the new approaches for the complex world of new products.

Portfolio Management for New Products, 2nd Edition

Robert G. Cooper, Scott J. Edgett, and Elko J. Kleinschmidt

Hard Cover | 345 pages
Published by Perseus Publishing, 2001
Price: $44.00 US


The Complete Guide to New Product Portfolio Management – Strategic, Operational and Tactical

  • Learn how to maximize the value of your portfolio of new products
  • Discover the impact effective portfolio management has on new product performance
  • Learn how to balance a portfolio and align it with your new product strategy
  • Discover how to implement a world-class portfolio management process
  • Benefit from the numerous examples and samples of real company valuation models, charts and metrics.

Key Topics:

  • Why portfolio management is essential to product innovation success
  • The major challenges associated with portfolio management
  • Requirements for effective portfolio management
  • What top performing companies do to drive higher value portfolios
  • Strategic, operational and tactical methods for managing your portfolio
  • The critical link between the portfolio and businesses strategy
  • Valuation and scoring methods, best practice charts and decision guides
  • Strategic allocation of resources
  • Making portfolio management work for your organization.

A ‘Must Read’ for people in these roles:

  • Business executives responsible for leading product innovation performance results
  • Senior executives responsible for R&D resource allocation
  • Executives and senior managers responsible for innovation performance.

Business Leaders – Order a copy for every member of your leadership team!

Companies Referenced:

  • Guinness
  • Thompson Corporation
  • Heinz
  • DuPont
  • Caterpillar
  • NCR
  • Unilever
  • Hallmark
  • Kodak
  • Allied Signal-Honeywell
  • English China Clay
  • Pfizer
  • AT&T
  • Motorola
  • ExxonMobil Chemical
  • Chempro
  • Hewlett-Packard
  • Telenor

Portfolio Management for New Products, 2nd Edition

Robert G. Cooper, Scott J. Edgett, and Elko J. Kleinschmidt

Hard Cover | 345 pages
Published by Perseus Publishing, 2001
Price: $44.00 US


Table of Contents:

Chapter 1: The Quest for the Right Portfolio Management Process

  • What Is Portfolio Management?
  • What Happens When You Lack Effective Portfolio Management
  • A Roadmap of the Book
  • Portfolio Management Is Vital
  • Much Room for Improvement
  • Major Challenges for Portfolio Management
  • Some Definitions

Chapter 2: Three Decades of R&D Portfolio Methods: What Progress?

  • Recent Advances in Portfolio Management Methods
  • Where Portfolio Management Stands Today
  • Major Gaps between Theory and Practice
  • Portfolio Management: It’s Not So Easy
  • Requirements for Effective Portfolio Management
  • What the Leaders Do: Three Goals in Portfolio Management

Chapter 3: Portfolio Management Methods: Maximizing the Value of the Portfolio

  • Goal 1: Maximizing the Value of the Portfolio
  • Using Net Present Value to Get Bang for Buck
  • Expected Commercial Value
  • The Productivity Index (PI)
  • Options Pricing Theory (OPT)
  • Dynamic Rank-Ordered List
  • The Dark Side of the Financial Approaches to Project Evaluation
  • Valuation Methods: Scoring Models
  • Developing and Using Scoring Models
  • Assessment of Scoring Models
  • Checklists As Portfolio Tools
  • Paired Comparisons
  • Value Maximization Methods: Summing Up

Chapter 4: Portfolio Management Methods: Seeking the Right Balance of Projects

  • Goal 2: Achieving a Balanced Portfolio
  • Bubble Diagrams
  • Variants of Risk-Reward Bubble Diagrams
  • Other Bubble Diagrams
  • Bubble Diagram Recap
  • Other Charts for Portfolio Management
  • Balance: Some Critical Comments

Chapter 5: Portfolio Management Methods: A Strong Link to Strategy

  • Goal 3: The Need to Build Strategy into the Portfolio
  • Linking Strategy to the Portfolio: Approaches
  • Developing a New Product Strategy for Your Business – A Quick Guide
  • Moving to the Attack Plan
  • Product and Technology Roadmaps
  • Strategic Buckets: A Powerful Top-Down Approach
  • Strengths and Weaknesses of Top-Down Approaches
  • The Special Case of Platform Projects
  • A Variant on Strategic Buckets: Target Spending Levels
  • Bottom-Up Approach: Strategic Criteria Built into Project Selection Tools
  • Top-Down, Bottom-Up Approach
  • But How Much Should We Spend?
  • Summary

Chapter 6: Portfolio Management Methods Used and Performance Results Achieved

  • The Average Business
  • The Best and Worst Performers
  • Satisfaction with Portfolio Management Methods
  • The Nature of Portfolio Methods Employed
  • Popularity and Use of the Various Portfolio Methods
  • Which Methods the Best Performers Use
  • Specific Project Selection Criteria Employed
  • Selecting Projects in Rounds
  • How Specific Portfolio Methods Perform
  • The Benchmark Businesses
  • Conclusions and Advice from Our Practices and Performance Study

Chapter 7: Challenges and Unresolved Issues

  • General Conclusions
  • Specific Conclusions and Challenges Identified in Effective Portfolio Management
  • Challenges and Issues
  • Portfolio Management Is Not the Complete Answer
  • The Path Forward

Chapter 8: Data Integrity: Obtaining Reliable Information

  • Types of Information Required
  • Marketing, Revenue, and Pricing Data
  • Manufacturing or Operations and Related Costs
  • Estimating Probabilities of Success
  • Estimating Resource Requirements
  • Deal with Uncertainties: Sensitivity Analysis and Monte Carlo Simulation
  • Summary

Chapter 9: Making Strategic Allocations of Resources: Deployment

  • In Search of the Right Portfolio Method
  • Resource Allocation Across Business Units: The Methods
  • Deciding the Spending Splits: The Strategic Buckets Model
  • Strategic Buckets: A Step-by-Step Guide
  • Some Features of the Strategic Buckets Decision Process
  • Summary

Chapter 10: Making Portfolio Management Work for You: Portfolio Management and Project Selection

  • Three Key Components of the Portfolio Management Process
  • Strategy: The First Key Driver of the Portfolio Management Process (PMP)
  • Gating: The Second Key Driver of the Portfolio Management Process
  • Portfolio Reviews: The Third Key Driver of the PMP
  • Two Fundamentally Different Approaches to a Portfolio Management Process
  • Approach 1: The Gates Dominate – An Overview of How It Works
  • Approach 2: The Portfolio Review Dominates
  • Pros and Cons of Approach 1 Versus Approach 2
  • In Conclusion: An Integrated Decision System

Chapter 11: Designing and Implementing the Portfolio Management Process: Some Thoughts and Tips Before You Charge In

  • Before You Charge In
  • Stage 1: Defining the Requirements
  • Stage 2: Designing the Portfolio Management Process – Key Action Items
  • Stage 3: Trial Installation and Adjustment
  • Stage 4: Implementing and Improvement
  • Winning at New Products

Portfolio Management for New Products, 2nd Edition

Robert G. Cooper, Scott J. Edgett, and Elko J. Kleinschmidt

Hard Cover | 345 pages
Published by Perseus Publishing, 2001
Price: $44.00 US


Customer Reviews

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“A great book for anyone who wants to develop winning new products.”
–Charles S. Coffey, Executive Vice President, Business Banking
Royal Bank of Canada

"A must-read for the business executive concerned about improving the return from new product R&D. The authors do a great job of laying out the pros and cons of the latest methods for effective portfolio management and project selection, and show how to integrate them into a workable process."
–Dr. Robert S. Wood, Director of Research Planning
Rohm and Haas Company

“The best source for how to start or perfect a winning new product strategy”
–Thomas E. Chorman, CFO and Vice President Finance, Worldwide Floor Products
Armstrong World Industries, Inc.

All posted customer reviews adhere to the Review Guidelines.

Portfolio Management for New Products, 2nd Edition

Robert G. Cooper, Scott J. Edgett, and Elko J. Kleinschmidt

Hard Cover | 345 pages
Published by Perseus Publishing, 2001
Price: $44.00 US


Dr. Robert G. Cooper

Robert G. Cooper is one of the most influential innovation thought-leaders in the business world today. He pioneered many groundbreaking discoveries in product innovation, including the Stage-Gate® Idea-to-Launch Process, now implemented by almost 80% of North American companies. Having spent 40 years studying the practices and pitfalls of 3000+ new product projects in thousands of companies, he has assembled the world's most comprehensive research in the field of product innovation management. His presentations and practical consulting advice have been widely applauded by corporate and business event audiences throughout the world, making him one of the most sought-after speakers.

A prolific author, Dr. Cooper has published 100+ academic articles and thirteen books, including the best-selling 'Winning at New Products', now in its 4th edition. He is the recipient of numerous prestigious awards including the Crawford Fellow from the Product Development and Management Association (PDMA) and the Maurice Holland Award from the Industrial Research Institute (IRI). He is also Professor Emeritus of Marketing and Technology Management at the DeGroote School of Business at McMaster University, and Distinguished Fellow at the Institute for the Study of Business Markets (ISBM) at Penn State University. 

Dr. Scott J. Edgett

Scott J. Edgett is Chief Executive Officer at Stage-Gate International and is internationally recognized as one of the world's top experts in product innovation. A high-profile speaker, sought-after consultant, and executive advisor, he is the pioneer of the critical practice of new product portfolio management, and principally focuses on issues affecting innovation performance, capability and leadership. Consulting and advising some of the world's best innovators and companies among the Fortune 1000, he has extensive experience working with large multi-national clients in a variety of industries. He is credited with helping business executives and product innovation professionals successfully implement world-class product innovation programs that have generated outstanding performance results.

A co-author of eight books, including the popular 'Product Innovation & Technology Strategy', and a published author of 70+ academic articles, Dr. Edgett is a former professor at the DeGroote School of Business, McMaster University.